UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 15, 2022 (June 13, 2022)
Future Health ESG Corp.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40788 | 86-2305680 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
8 The Green, Suite 12081
Dover, DE 46260
(Address of principal executive offices, including zip code)
(833) 388-8734
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| x | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Units, each consisting of one share of common stock and one-half of one redeemable warrant | FHLTU | The Nasdaq Stock Market LLC | ||
| Common stock, par value $0.0001 per share | FHLT | The Nasdaq Stock Market LLC | ||
| Redeemable warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per share | FHLTW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 1.01. | Entry into a Material Definitive Agreement. |
Business Combination Agreement
Overview
Future Health ESG Corp., a Delaware corporation (“Future Health”), entered into a business combination agreement, effective as of June 13, 2022 (the “Business Combination Agreement”), to acquire 100% of the issued and outstanding shares of common stock (the “Purchased Shares”) of Excelera DCE, a California corporation (“Excelera”), from its sole owner, MacArthur Court Acquisition Corp., a California corporation (“Seller”), in exchange for the issuance of 40,000,000 shares of Future Health Common Stock at the Closing (“Closing Stock Consideration”) and an additional 20,000,000 shares of Future Health Common Stock (the “Earnout Shares”) to be paid in accordance with the terms, and subject to the conditions, set forth in Exhibit D of the Business Combination Agreement (the “Business Combination”). The acquisition is intended to be treated by all parties as a tax-free reorganization within the meaning of Sections 368(a)(1)(C) or (D) of the Internal Revenue Code of 1986, as amended (the “Intended Tax Treatment”). Upon completion of the transaction, the combined company is expected to operate as Excelera Health, Inc., and is expected to be listed on the Nasdaq under the new ticker symbol “XLRA”. Unless otherwise defined herein, the capitalized terms used herein are defined in the Business Combination Agreement.
No later than three business days following the satisfaction or waiver of the conditions set forth in the Business Combination Agreement (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time), the Business Combination will be consummated by the transfer of the Purchased Shares to Future Health and the issuance of the Closing Stock Consideration to Seller.
Transfer of Securities; Issuance of Securities in exchange for Transferred Securities
On the Closing Date, (i) Seller will sell, assign, transfer, convey and deliver to Future Health, and Future Health will purchase, assume, acquire and accept from Seller, all of Seller’s rights, title and interest in and to the Purchased Shares, in each case, free and clear of any Liens (other than transfer restrictions imposed thereon by applicable securities Law) and (ii) Future Health will instruct its transfer agent to cause the Closing Stock Consideration to be accepted into The Depository Trust Company and to be issued (in uncertificated book-entry form) to the Seller.
Earnout Shares
As additional purchase consideration, Future Health will deliver (or cause to be delivered) to Seller or Seller’s permitted Assignee(s), 20,000,000 shares of Future Health Common Stock (which will be equitably adjusted for share splits, (including share consolidations), combinations, exchanges, readjustments of shares, or similar transactions, or any stock dividends or distributions paid in shares, reclassifications, share dividends, combinations, recapitalizations and the like with respect to Future Health common stock occurring after the Closing) (the “Earnout Payment”) within five business days after the filing (but in no event later than the fifth anniversary of the Closing Date) of the first Future Health Quarterly Report on Form 10-Q or Annual Report on Form 10-K (each prepared in accordance with GAAP) in which Consolidated Revenues in the most recent fiscal quarter included therein shall have exceeded One Hundred Fifty Million U.S. Dollars ($150,000,000), provided that such Earnout Payment shall only be payable if the filing of such qualifying Form 10-Q or Form 10-K occurs prior to the fifth anniversary of the Closing Date (the “Earnout Period”). Notwithstanding anything to the contrary herein, all Earnout Shares required to be paid will be paid within 5 years of the Closing. In the event, and only in the event, of a Going Private Transaction prior to the end of the Earnout Period, Future Health will deliver (or cause to be delivered) to Seller or, in connection with Seller’s liquidation following the Closing or as otherwise permitted by Rev. Proc. 84-42, to an Affiliate of Seller or the shareholders of the Seller, a pro rata portion of the Earnout Shares (the “Going Private Earnout”), within five (5) Business Days after the closing of the Going Private Transaction, based on the most recently filed Future Health Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be, with such Going Private Earnout being the number of shares of Future Health Common Stock equal to the product of (a) 20,000,000 multiplied by (b) the difference of (A) the Consolidated Revenues (determined in accordance with GAAP) of Future Health in the most recent fiscal quarter included in such Form 10-Q or Form 10-K less (B) $88,000,000, being the agreed quarterly revenue for the first quarter of 2022, divided by (c) $62,000,000.
Pursuant to the Business Combination Agreement, Future Health and Seller shall in connection with the Closing enter into a separate registration rights agreement with respect to the Earnout Shares in form and substance satisfactory to each of them.
Representations and Warranties; Covenants
The Business Combination Agreement contains representations and warranties and covenants of the parties thereto that are customary for transactions of this type. The representations and warranties in the Business Combination Agreement include, among others, those relating to, (a) entity organization and authority, (b) capitalization, (c) authorization to enter into the Business Combination Agreement, (d) legal compliance and approvals, (e) financial statements and liabilities, (f) absence of changes, (g) litigation, (h) employee benefit matters, (i) labor and employment matters, (j) taxes, (k) in the case of Excelera only, (1) sufficiency of assets, (2) real property, (3) intellectual property, (4) environmental matters, (5) material contracts, (6) insurance, (7) material healthcare providers, (8) certain business practices, sanctions, (9) data privacy and data protection, (10) interested party transactions, (11) Exchange Act, (12) information provided for private placements and proxy statement, (13) healthcare and insurance laws and (14) healthcare and insurance permits, and (l) in the case of Future Health only, (1) its public filings, (2) the PIPE Investment and FPA Investment (each as defined below), (3) its listing, (4) its investigation and reliance, and (5) its trust account. The covenants in the Business Combination Agreement are customary for transactions of this type and include, among others, those relating to, (a) pre-closing conduct of business by the parties, (b) financing efforts, (c) absence of claims against the trust account, (d) not to solicit or negotiate with third parties regarding alternative transactions and comply with certain related restrictions and to cease discussions regarding alternative transactions, (e) the filing of a registration statement on Form S-4 or a proxy statement in connection with the Business Combination (the “Registration Statement”), (f) filing all Tax Returns consistent with the Intended Tax Treatment, and (g) cooperation in obtaining necessary approvals from governmental agencies.
No Survival
None of the representations, warranties, covenants, obligations or other agreements in the Business Combination Agreement or in any certificate, statement or instrument delivered pursuant to the Business Combination Agreement, including any rights arising out of any breach of such representations, warranties, covenants, obligations, agreements and other provisions, shall survive the closing and all such representations, warranties, covenants, obligations or other agreements shall terminate and expire upon the occurrence of the closing (and there shall be no liability after the closing in respect thereof), except for those covenants and agreements contained therein that by their terms expressly apply in whole or in part after the closing and then only with respect to any breaches occurring after the closing.
Conditions to Consummation of the Business Combination Agreement
General Conditions
The consummation of the Business Combination is conditioned upon, among other things, (a) receipt of the Future Health stockholders’ approval, (b) if applicable, effectiveness of the Registration Statement filed by Future Health in connection with the Business Combination, no stop order having been issued by the U.S. Securities and Exchange Commissions (the “SEC”) remaining in effect with respect to the Registration Statement, and no proceeding seeking such a stop order having been pending before or threatened by the SEC, (c) the absence of any governmental order, statute, rule or regulation enjoining or prohibiting the consummation of the Business Combination, (d) the expiration or termination of the waiting period under the Hart-Scott-Rodino Act, (e) all required consents, approvals and authorizations set forth on certain disclosure schedules having been obtained, (f) sale and issuance by Future Health of Future Health Common Stock in an aggregate amount equal to the PIPE Commitment and Additional Shares, if applicable, shall have been consummated in accordance with the terms of the Subscription Agreement and the Forward Purchase Agreement, (g) the shares of Future Health Common Stock shall be listed on Nasdaq, or another national securities exchange mutually agreed to by the parties, as of the Closing Date, and (h) the Spin-Out and the Contributions as defined and described in the Business Combination Agreement shall have been effected and completed.
Future Health’s Conditions to Closing
The obligations of Future Health to consummate the Business Combination are also conditioned upon, among other things, (a) customary closing conditions, including, without limitation, Seller and Excelera’s delivery of certain agreements, including an employee leasing agreement, office lease agreement, and laboratory services agreement, (b) no material adverse event having occurred with respect to Excelera, and (c) occurrence of the Contributions to Excelera and adoption by Seller of the Plan of Liquidation each as described in the Business Combination Agreement.
Seller’s and Excelera’s Conditions to Closing
The obligations of Seller and Excelera to consummate the Business Combination also are conditioned upon, among other things, (a) customary closing conditions, including, without limitation, Future Health’s delivery of certain agreements, (b) receipt of Seller’s stockholders’ approval, (c) termination of the Future Health Insider Agreement, (d) disbursement of the Future Health Trust Fund, and (e) no material adverse event having occurred with respect to Future Health.
Termination
The Business Combination Agreement allows the parties to terminate the Business Combination Agreement if certain customary conditions described in the Business Combination Agreement are not satisfied, including, without limitation, each party’s right to terminate, subject to certain limited exceptions, if the Business Combination is not consummated by December 9, 2022.
If the Business Combination Agreement is validly terminated, none of the parties to the Business Combination Agreement will have any liability or any further obligation under the Business Combination Agreement, except as set forth in Section 7.03, Section 7.10, Section 9.02 and Article X of the Business Combination Agreement, or in the case of termination subsequent to a willful and material breach of the Business Combination Agreement by a party thereto.
The foregoing summary of the Business Combination Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Business Combination Agreement, a copy of which is attached as Exhibit 2.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
PIPE Subscription Agreement
Simultaneous with entering into the Business Combination Agreement, Future Health entered into a Subscription Agreement (the “Subscription Agreement”) with an investor (the “PIPE Investor”), pursuant to which, among other things, the PIPE Investor agreed to purchase an aggregate of 9,090,909 shares of Future Health Common Stock immediately prior to the Business Combination at a cash purchase price of $11.00 per share, resulting in aggregate proceeds of $100,000,000 (the “PIPE Investment”) to be placed in an escrow account by no later than 5 days following the delivery of PCAOB audited financials statements of Excelera.
The Subscription Agreement contains customary representations, warranties, covenants, agreements of Future Health and the PIPE Investor. The Subscription Agreement includes customary closing conditions. The PIPE Investor has the right to terminate the Subscription Agreement if the transactions contemplated in the Business Combination Agreement have not been consummated by December 14, 2022.
The foregoing description of the Subscription Agreement does not purport to be complete and is qualified in its entirety by the reference to the full text of the Subscription Agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
Forward Purchase Agreement
Simultaneous with entering into the Business Combination Agreement, Future Health entered into a Forward Purchase Agreement (the “Forward Purchase Agreement”) with an investor (the “FPA Investor”), pursuant to which, among other things, the FPA Investor agreed to purchase shares of Future Health Common Stock in open market purchases at an an aggregate purchase price of $20,000,000 (the “Forward Purchase Shares”) following the execution of the Business Combination Agreement and prior to the date which is two (2) business days prior to the date of special meeting of Future Health’s stockholders called in connection with the Business Combination (the “Purchase Deadline”); provided, however, that in no event shall the FPA Investor be required to purchase Forward Purchase Shares at a price in excess $11.00 per share. In the event the FPA Investor purchases less than $20,000,000 of Forward Purchase Shares by the Purchase Deadline, the FPA Investor shall purchase from Future Health, immediately prior to the Business Combination, the requisite number of additional shares at $11.00 per share to satisfy the unfulfilled portion of the $20,000,000 purchase commitment (the Forward Purchase Shares together with the Additional Shares, the “FPA Investment”).
The Forward Purchase Agreement contains customary representations, warranties, covenants and agreements of Future Health and the FPA Investor. The Forward Purchase Agreement shall terminate on the earlier of (i) the closing of the Business Combination and (ii) the later of (x) December 14, 2022 and (y) if Future Health’s stockholders approve an extension of the date by which Future Health must consummate a business combination, such later date as approved by Future Health’s stockholders.
The foregoing description of the Forward Purchase Agreement does not purport to be complete and is qualified in its entirety by the reference to the full text of the Forward Purchase Agreement, a copy of which is attached as Exhibit 10.2 to this Current Report on Form 8-K, and is incorporated herein by reference.
Lock-Up Agreement
Simultaneous with entering into the Business Combination Agreement, Future Health, Future Health ESG Associates 1, LLC (the “Sponsor”), BEA Holdings, LLC, M2 Enterprises Holdings, LLC, HC1.com, Inc., MB Equity, LLC, R. Mark Lubbers, Dr. F. John Mills and Dr. Nancy L. Snyderman (collectively, the “Founders” and together with the Sponsor, the “Key Future Health Stockholders”), the Seller, PIPE Investor, and the FPA Investor (collectively, the “Insiders”), collectively representing approximately 79% of the shares of Future Health expected to be outstanding immediately after Closing (the “Lock-Up Shares”), each entered into a Lock-Up Agreement pursuant to which the Insiders have agreed not to sell, transfer, or exchange the Lock-Up Shares until the earlier of:
(x) one year after the Closing Date,
(y) the date on which Future Health completes a liquidation, merger, capital stock exchange, reorganization or other similar transactions that result in all of Future Health’s stockholders having the right to exchange their shares for cash, securities or other property, or
(z) with respect to 1/3 of the Lock-Up Shares in each instance, the dates subsequent to the Closing on which price of the Future Health Common Stock equals or exceeds a target price of $12.00, $13.00, and $14.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for a period of 20 trading days within any consecutive 30 trading day period, provided, that for the purpose of this clause (z), multiple target prices may be met simultaneously.
The Lock-Up Agreement further provides that each Insider shall in no event sell or transfer within any contiguous 90-day period more than 1/3 of the Lock-Up Shares originally issued to him/her/it.
Notwithstanding the foregoing, the Seller and its shareholders are permitted to sell up to twenty percent (20%) of the stock they receive in order to pay taxes relating to the transaction and the subsequent liquidation of the Seller.
The foregoing description of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of the Lock-Up Agreement, the form of which is attached as Exhibit 10.3 to this Current Report on Form 8-K, and is incorporated herein by reference.
Amended and Restated Registration Rights Agreement
At the closing of the Business Combination, the Sponsor, certain other stockholders of Future Health and Seller (collectively, the “Registration Rights Holders”) and Future Health will enter into an Amended and Restated Registration Rights Agreement (the “Amended and Restated Registration Rights Agreement”). Pursuant to the Amended and Restated Registration Rights Agreement, Future Health will agree that, within 30 calendar days after the consummation of the Business Combination, it will file with the SEC a registration statement registering the resale of certain securities held by or issuable to the Registration Rights Holders (the “Resale Registration Statement”), and Future Health will use its commercially reasonable efforts to have such Resale Registration Statement declared effective as soon as reasonably practicable after the filing thereof. In certain circumstances, certain holders can demand up to three underwritten offerings, and certain holders will be entitled to piggyback registration rights.
The foregoing description of the Amended and Restated Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of the Amended and Restated Registration Rights Agreement, the form of which is attached as Exhibit 10.4 to this Current Report on Form 8-K, and is incorporated herein by reference.
Sponsor Stockholder Support Agreement
Future Health has delivered to Seller the Sponsor Stockholder Support Agreement (the “Sponsor Stockholder Support Agreement”), dated June 13, 2022, by and among Future Health, Seller, Excelera and the Key Future Health Stockholders pursuant to which, among other things, the Key Future Health Stockholders agreed to support the approval and adoption of the transactions contemplated by the Business Combination Agreement, including agreeing to vote all Future Health Common Stock owned by it in favor of the Business Combination, and to execute and deliver any further document, agreement or instrument of assignment, transfer or conveyance as necessary to effectuate the purposes thereof and as may be reasonably requested in writing by another party thereto
The foregoing description of the Sponsor Stockholder Support Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Sponsor Stockholder Support Agreement, a copy of which is attached as Exhibit 10.5 to this Current Report on Form 8-K, and is incorporated herein by reference.
Amendment to Underwriting Agreement
Simultaneously with the execution of the Business Combination Agreement, Future Health and Cantor Fitzgerald & Co. (“Cantor”) entered into an amendment (the “Underwriting Agreement Amendment”) to the Underwriting Agreement, dated as September 9, 2021 (the “Underwriting Agreement”), by and between Future Health and Cantor. Pursuant to the Underwriting Agreement Amendment, Cantor agreed to accept 272,727 shares of Future Health Common Stock (the “Deferred Commission Shares”) in exchange for a $3,000,000 reduction in the cash portion of deferred underwriting fees payable at closing of the Business Combination.
A copy of the Underwriting Agreement Amendment is filed with this Current Report on Form 8-K as Exhibit 1.1 and is incorporated herein by reference, and the foregoing description of the Underwriting Agreement Amendment is qualified in its entirety by reference thereto.
The Business Combination Agreement, the Lock-Up Agreement, the Amended and Restated Registration Rights Agreement, the Subscription Agreement, the Forward Purchase Agreement, the Sponsor Stockholder Support Agreement and the Amendment to Underwriting Agreement (the “Included Agreements”) have been included to provide investors with information regarding their terms. They are not intended to provide any other factual information about Future Health, Excelera or their affiliates. The representations, warranties, covenants and agreements contained in each Included Agreement and the other documents related thereto were made only for purposes of such Included Agreement as of the specific dates therein, were solely for the benefit of the parties to such Included Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Included Agreements instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Included Agreements and should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Included Agreements, as applicable, which subsequent information may or may not be fully reflected in Future Health’s public disclosures.
| Item 3.02. | Unregistered Sales of Equity Securities. |
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K with respect to the issuance of shares of common stock of Future Health to the PIPE Investor and the FPA Investor is incorporated herein by reference in this Item 3.02. The shares of common stock of Future Health issuable to the PIPE Investor and the FPA Investor in connection with the PIPE Investment and the FPA Investment will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and will be issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.
| Item 7.01. | Regulation FD Disclosure. |
On June 14, 2022, Future Health and Excelera issued a joint press release announcing the execution of the Business Combination Agreement. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Exhibit 99.1 and the information set forth therein will not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise be subject to the liabilities of that section, nor will they be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filings. This Current Report on Form 8-K will not be deemed an admission as to the materiality of any information contained in this Item 7.01, including Exhibit 99.1.
Important Information for Stockholders
This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any securities or constitute a solicitation of any vote or approval. This Current Report on Form 8-K shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or an exemption therefrom.
In connection with the Business Combination, Future Health will file a proxy statement or a Registration Statement on Form S-4 with the SEC, which registration statement will include a proxy statement for Future Health. Future Health also plans to file other documents with the SEC regarding the Business Combination. After the proxy statement or the Registration Statement has been cleared by the SEC, a definitive proxy statement will be mailed to the stockholders of Future Health. STOCKHOLDERS OF FUTURE HEALTH ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE PROPOSED TRANSACTIONS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Stockholders will be able to obtain free copies of the proxy statement and other documents containing important information about Future Health and Excelera once such documents are filed with the SEC, through the website maintained by the SEC at http://www.sec.gov.
Participants in the Solicitation
Future Health and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Future Health in connection with the Business Combination. Excelera and its officers and directors may also be deemed participants in such solicitation. Information about the directors and executive officers of Future Health is set forth in Future Health’s final prospectus filed with the SEC pursuant to Rule 424(b) of the Securities Act on September 10, 2021 and is available free of charge at the SEC’s website at www.sec.gov or by directing a request to: 8 The Green Suite 12081, Dover, DE 19901. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
Forward Looking Statements
The information included herein and in any oral statements made in connection herewith include forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. These statements are based on the beliefs and assumptions of the respective management teams of Future Health, Excelera and Seller. Although Future Health, Excelera and Seller believe that their respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, none of Future Health, Excelera or Seller can assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Forward-looking statements generally relate to future events or future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern Future Health, Excelera or Seller’s expectations, strategy, plans or intentions. Forward-looking statements contained in this Current Report on Form 8-K include statements about:
| ● | the anticipated benefits of the Business Combination; |
| ● | the ability of Future Health, Excelera and the Seller to complete the Business Combination, including satisfaction or waiver of the conditions to the Business Combination; |
| ● | the anticipated costs associated with the proposed Business Combination; |
| ● | Excelera’s financial and business performance following the Business Combination, including financial projections and business metrics; |
| ● | Excelera’s ability to effectively grow and to effectively expand operations; |
| ● | the potential business or economic disruptions caused by current and future pandemics, such as the COVID-19 pandemic; |
| ● | the ability to obtain and/or maintain the listing of Future Health’s common stock and the warrants on Nasdaq, and the potential liquidity and trading of its securities; |
| ● | the risk that the proposed Business Combination disrupts current plans and operations of Excelera as a result of the announcement and consummation of the proposed Business Combination; |
| ● | the ability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, and retain its key employees; |
| ● | changes in applicable laws or regulations; |
| ● | Excelera’s ability to raise financing in the future; |
| ● | Excelera’s officers and directors allocating their time to other businesses and potentially having conflicts of interest with Excelera’s business or in approving the Business Combination; |
| ● | the projected financial information, growth rate, strategies, and market opportunities for Excelera; |
| ● | Excelera’s ability to successfully expand in its existing markets and into new markets; |
| ● | Exelera’s ability to provide physicians with precision medicine insights and financial resources; |
| ● | Excelera’s ability, assessment of and strategies to compete with its competitors; |
| ● | the success of Excelera’s marketing strategies; |
| ● | Excelera’s ability to attract and retain talent and the effectiveness of its compensation strategies and leadership; |
| ● | general economic conditions and their impact on demand for the Excelera platform; |
| ● | Excelera’s ability to maintain its licenses and operate in regulated industries; |
| ● | Excelera’s ability to prevent and guard against cybersecurity attacks; |
| ● | Excelera’s reliance on third party service providers for processing payments, web and mobile operating systems, software, background checks, and insurance policies; |
| ● | seasonal sales fluctuations; |
| ● | Excelera’s future capital requirements and sources and uses of cash; |
| ● | the outcome of any known and unknown litigation and regulatory proceedings, including the occurrence of any event, change or other circumstances, including the outcome of any legal proceedings that may be instituted against Future Health, Excelera and Seller following the announcement of the Business Combination Agreement and the transactions contemplated therein, that could give rise to the termination of the Business Combination Agreement; |
| ● | Excelera’s ability to maintain and protect its brand and its intellectual property; and |
| ● | other factors detailed under the section entitled “Risk Factors” in the proxy statement or the Registration Statement on Form S-4 to be filed in connection with the Business Combination. |
The forward-looking statements contained herein are based on current expectations and beliefs concerning future developments and their potential effects on Future Health and/or Excelera. There can be no assurance that future developments affecting Future Health and/or Excelera will be those that Future Health and/or Excelera have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control or the control of Excelera), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in the proxy statement or the Registration Statement on Form S-4 to be filed in connection with the Business Combination. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by the potential business or economic disruptions caused by current and future pandemics, such as the COVID-19 pandemic and there may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. Future Health, Excelera and Seller undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
The following exhibits are filed with this Form 8-K:
| † | Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FUTURE HEALTH ESG CORP. | ||
| Date: June 15, 2022 | By: | /s/ Bradley A. Bostic |
| Name: Bradley A. Bostic Title: Chief Executive Officer | ||
Exhibit 1.1
AMENDMENT TO
UNDERWRITING AGREEMENT
This Amendment (the “Amendment”) to the Underwriting Agreement, dated as of September 9, 2021 (the “Agreement”), by and between Future Health ESG Corp., a Delaware corporation (the “Company”) and Cantor Fitzgerald & Co. (“Cantor Fitzgerald” and, together with the Company, the “Parties”), is made and entered into by the Parties as of June 13, 2022 (the “Effective Date”).
WHEREAS, the Parties desire to amend the Agreement as hereinafter set forth.
NOW, THEREFORE, the Parties, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound hereby, do mutually agree as follows:
1. Capitalized Terms. Any capitalized terms not defined in this Amendment shall have the meaning ascribed to such term in the Agreement.
2. Amendment. Solely in connection with a Business Combination involving the Company and Excelera DCE (the “Excelera Transaction”), as of the Effective Date:
| (a) | The reference to $7,700,000 in the fourth sentence of Section 1.1.2 of the Agreement shall be replaced with $5,700,000; |
| (b) | The second sentence of Section 1.2.3 of the Agreement shall be deemed deleted in its entirety; and |
| (c) | Section 1.3 of the Agreement shall be deemed deleted and replaced in its entirety with the following: |
“1.3 Deferred Underwriting Commission. The Underwriters agree that $5,700,000 from the sale of the Firm Units (collectively, the “Deferred Underwriting Commission”) held in the Trust Account will be payable directly from the Trust Account, without accrued interest, to Cantor Fitzgerald for its own account upon consummation of the Company’s initial Business Combination and (ii) $300,000 held in the Trust Account will be payable directly from the Trust Account, without accrued interest, to Roth Capital Partners LLC upon consummation of the Company’s initial Business Combination (the “Roth Fee”). Upon the consummation of the Company’s initial business combination, the Company will issue or transfer or cause to be transferred to Cantor Fitzgerald 272,727 shares of Common Stock (“Deferred Fee Shares”), free and clear of all liens, encumbrances and other restrictions on the pledge, sale or other transfer of such shares of Common Stock. In the event the Company is unable to issue such shares of Common Stock without any of the foregoing restrictions, Cantor Fitzgerald (together with any of its affiliates or accounts over which it and/or its affiliates have discretionary authority, the “Cantor Parties”) may elect (in its sole discretion) to purchase shares of Common Stock in the open market from stockholders of the Company who cancel their previously delivered notice of redemption after the applicable redemption deadline (“Purchased Shares”) and continue to hold such Purchased Shares through the closing of the Excelera Transaction, then the number of Deferred Fee Shares to be issued to Cantor Fitzgerald will be reduced by the number of shares of Common Stock so purchased and held by Cantor Parties. If Cantor Parties make any such purchases, the Company shall pay cash to Cantor Fitzgerald in an amount equal to the aggregate amount of each Purchased Share multiplied by the purchase price paid by the Cantor Parties for such Purchased Share; provided that in no event shall the Company pay more than $10.05 per Purchased Share to Cantor Fitzgerald. In the event that the Company is unable to consummate a Business Combination and CST, as the trustee of the Trust Account (in this context, the “Trustee”), commences liquidation of the Trust Account as provided in the Trust Agreement, Cantor Fitzgerald agrees that: (i) all rights or claims to the Deferred Underwriting Commission shall be forfeited; and (ii) the Deferred Underwriting Commission, together with all other amounts on deposit in the Trust Account, shall be distributed on a pro-rata basis among the Public Stockholders. ” To the extent Cantor Parties purchase and hold less than 272,727 shares of Common Stock as of the Closing pursuant to this clause, the Company shall issue to Cantor Fitzgerald a number of Deferred Fee Shares equal to the difference between 272,727 and the number of Purchased Shares. The number of Deferred Fee Shares to be issued shall be calculated using the volume weighted average price of the Company’s Common Stock for the five trading days prior to the closing of the Business Combination. Such newly issued Deferred Fee Shares shall be delivered in book-entry form promptly upon the closing of the Company’s initial Business Combination. Such Deferred Fee Shares will be issued with registration rights substantially consistent with those received by any investor in any PIPE that closes substantially concurrently with the Business Combination (or if no PIPE closes, substantially consistent with those provided to the Sponsor), enabling Cantor Fitzgerald to promptly resell its shares pursuant to a resale registration statement (“Registration Rights Obligation”). If such Registration Rights are not granted, or the Company or any successor thereto does not comply in all material respects with the Registration Rights Obligation, the Company shall promptly pay to Cantor Fitzgerald the entire amount of the balance of the Deferred Underwriting Commission in cash.
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3. Effectiveness of Agreement. This Amendment constitutes an amendment to the Agreement in accordance with the terms thereof and shall be effective and enforceable upon all parties to the Agreement in accordance with its terms, as amended hereby. Except as amended herein, the Agreement shall continue in full force and effect and shall be enforceable in accordance with its terms, and for avoidance of doubt, this Amendment shall not apply to any Business Combination other than the Excelera Transaction and the original terms of the Agreement shall govern any such other Business Combination.
4. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of law (whether of New York or any other jurisdiction).
5. Entire Agreement. The Agreement, as amended by this Amendment, constitutes the entire agreement between the parties relative to the specific subject matter hereof.
6. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the Effective Date.
| FUTURE HEALTH ESG CORP. | |||
| By: | /s/ Travis Morgan | ||
| Name: Travis Morgan | |||
| Title: Chief Financial Officer | |||
| CANTOR FITZGERALD & CO. | |||
| By: | /s/ Sage Kelly | ||
| Name: Sage Kelly | |||
| Title: Head of Investment Banking | |||
Exhibit 2.1
BUSINESS COMBINATION AGREEMENT AND PLAN OF REORGANIZATION
by and among
FUTURE HEALTH ESG CORP.,
EXCELERA DCE,
and
MACARTHUR COURT ACQUISITION CORP.
Dated as of June 13, 2022
TABLE OF CONTENTS
Page
| Article I. DEFINITIONS | 3 |
| Section 1.01 Certain Definitions | 3 |
| Section 1.02 Further Definitions | 14 |
| Section 1.03 Construction | 16 |
| Article II. PURCHASE AND SALE | 16 |
| Section 2.01 Purchase and Sale | 16 |
| Section 2.02 Stock Consideration | 16 |
| Section 2.03 Closing | 17 |
| Section 2.04 Articles of Incorporation; Bylaws | 17 |
| Section 2.05 Directors and Officers | 17 |
| Article III. REPRESENTATIONS AND WARRANTIES REGARDING SELLER | 18 |
| Section 3.01 Organization and Qualification | 18 |
| Section 3.02 Authority Relative to this Agreement | 18 |
| Section 3.03 No Conflict; Required Filings and Consents | 19 |
| Section 3.04 Ownership of Purchased Shares | 19 |
| Section 3.05 Absence of Litigation | 20 |
| Section 3.06 Corporate Matters | 20 |
| Section 3.07 Brokers | 20 |
| Article IV. REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY | 21 |
| Section 4.01 Organization and Qualification; Subsidiaries | 21 |
| Section 4.02 Articles of Incorporation and Bylaws | 21 |
| Section 4.03 Capitalization | 21 |
| Section 4.04 Authority Relative to this Agreement | 22 |
| Section 4.05 No Conflict; Required Filings and Consents. | 22 |
| Section 4.06 Permits; Compliance | 23 |
| Section 4.07 Financial Statements | 23 |
| Section 4.08 Absence of Certain Changes or Events | 25 |
| Section 4.09 Absence of Litigation | 25 |
| Section 4.10 Sufficiency of Assets | 25 |
| Section 4.11 Employee Benefit Plans | 26 |
| Section 4.12 Labor and Employment Matters | 27 |
| Section 4.13 Real Property; Title to Assets | 29 |
| Section 4.14 Intellectual Property | 30 |
| Section 4.15 Taxes | 33 |
| Section 4.16 Environmental Matters | 35 |
| Section 4.17 Material Contracts | 36 |
| Section 4.18 Insurance | 38 |
| Section 4.19 Material Healthcare Providers | 38 |
| Section 4.20 Certain Business Practices; Sanctions | 38 |
| Section 4.21 Interested Party Transactions | 39 |
| Section 4.22 Exchange Act | 39 |
| Section 4.23 Information Provided for Private Placements and Proxy Statement | 39 |
| Section 4.24 Healthcare and Insurance Laws | 40 |
| Section 4.25 Healthcare and Insurance Permits | 41 |
| Section 4.26 Exclusivity of Representations and Warranties | 42 |
(i)
| Article V. REPRESENTATIONS AND WARRANTIES OF FUTURE HEALTH | 42 |
| Section 5.01 Corporate Organization | 43 |
| Section 5.02 Organizational Documents | 43 |
| Section 5.03 Capitalization | 43 |
| Section 5.04 Authority Relative to This Agreement | 44 |
| Section 5.05 No Conflict; Required Filings and Consents | 45 |
| Section 5.06 Compliance | 45 |
| Section 5.07 SEC Filings; Financial Statements; Sarbanes-Oxley | 46 |
| Section 5.08 Absence of Certain Changes or Events | 48 |
| Section 5.09 Absence of Litigation | 48 |
| Section 5.10 Board Approval; Vote Required | 48 |
| Section 5.11 Brokers | 48 |
| Section 5.12 Future Health Trust Fund | 49 |
| Section 5.13 Employees | 49 |
| Section 5.14 Taxes | 50 |
| Section 5.15 Listing | 51 |
| Section 5.16 Private Placements | 52 |
| Section 5.17 Future Health’s Investigation and Reliance | 52 |
| Article VI. CONDUCT OF BUSINESS PENDING THE closing | 53 |
| Section 6.01 Conduct of Business by the Company Pending the Closing. | 53 |
| Section 6.02 Conduct of Business by Future Health Pending the Closing | 56 |
| Section 6.03 Claims Against Trust Account | 58 |
| Article VII. ADDITIONAL AGREEMENTS | 59 |
| Section 7.01 Proxy Statement | 59 |
| Section 7.02 Future Health Stockholders’ Meeting | 60 |
| Section 7.03 Access to Information; Confidentiality | 61 |
| Section 7.04 Exclusivity | 62 |
| Section 7.05 Employee Benefits Matters | 62 |
| Section 7.06 Adoption of Equity Plan and Stock Purchase Program | 63 |
| Section 7.07 Directors’ and Officers’ Indemnification | 63 |
| Section 7.08 Notification of Certain Matters | 64 |
| Section 7.09 Further Action; Reasonable Best Efforts | 64 |
| Section 7.10 Public Announcements | 65 |
| Section 7.11 Stock Exchange Listing | 65 |
| Section 7.12 Antitrust | 66 |
| Section 7.13 Trust Account | 67 |
| Section 7.14 Tax Matters | 67 |
| Section 7.15 Directors | 69 |
| Section 7.16 Audited Financial Statements | 69 |
| Section 7.17 Internal Controls | 69 |
(ii)
| Article VIII. CONDITIONS TO THE CLOSING | 70 |
| Section 8.01 Conditions to the Obligations of Each Party | 70 |
| Section 8.02 Conditions to the Obligations of Future Health | 71 |
| Section 8.03 Conditions to the Obligations of Seller and the Company | 72 |
| Article IX. TERMINATION, AMENDMENT AND WAIVER | 74 |
| Section 9.01 Termination | 74 |
| Section 9.02 Effect of Termination | 75 |
| Section 9.03 Expenses | 75 |
| Section 9.04 Amendment | 75 |
| Section 9.05 Waiver | 76 |
| Article X. GENERAL PROVISIONS | 76 |
| Section 10.01 Notices | 76 |
| Section 10.02 Nonsurvival of Representations, Warranties and Covenants | 77 |
| Section 10.03 Severability | 77 |
| Section 10.04 Entire Agreement; Assignment | 77 |
| Section 10.05 Parties in Interest | 77 |
| Section 10.06 Governing Law | 77 |
| Section 10.07 Waiver of Jury Trial | 78 |
| Section 10.08 Headings | 78 |
| Section 10.09 Counterparts | 78 |
| Section 10.10 Specific Performance | 78 |
| Section 10.11 No Recourse | 80 |
| EXHIBIT A | Form of Sponsor Stockholder Support Agreement |
| EXHIBIT B | Form of Amended and Restated Registration Rights Agreement |
| EXHIBIT C | Form of Lock-Up Agreement |
| EXHIBIT D | Earnout Payment |
| SCHEDULE A | Future Health Anchor Investors and Initial Stockholders |
| SCHEDULE B | Seller and Company Knowledge Parties |
(iii)
BUSINESS COMBINATION AGREEMENT AND PLAN OF REORGANIZATION, dated as of June 13, 2022 (this “Agreement”), by and among Future Health ESG Corp., a Delaware corporation (“Future Health”), MacArthur Court Acquisition Corp., a California corporation (“Seller”), which owns all of the issued and outstanding shares of common stock of Excelera DCE, a California corporation (the “Company”), and the Company.
WHEREAS, upon the terms and subject to the conditions of this Agreement, Future Health will purchase from Seller, and Seller will sell to Future Health, 100% of the issued and outstanding shares of Company Common Stock (the “Purchased Shares”) in exchange for Future Health Common Stock (the “Stock Sale”);
WHEREAS, each of the parties intends that, for U.S. federal income Tax purposes, (i) the purchase and sale of the Purchased Shares described in Article II, the Contributions, Contribution Agreements and the Plan of Liquidation (each as defined herein) of Seller shall qualify as a “reorganization” within the meaning of Section 368(a)(1)(C) or (D) of the Code (as defined herein), (ii) the PIPE Investment (as defined herein) shall constitute a contribution to capital pursuant to Code Section 118, which shall not generate taxable income to Future Health or the PIPE Investor (as defined herein), or adversely affect the tax free status of the reorganization described in subsection (i), and (iii) this Agreement shall constitute a “plan of reorganization” within the meaning of Section 368 of the Code and Treasury Regulations Sections 1.368-2(g) and 1.368-3 (clauses (i) and (ii), the “Intended Tax-Free Treatment”);
WHEREAS, the Board of Directors of Seller (the “Seller Board”) and the Board of Directors of the Company (the “Company Board”) has each unanimously determined that the Transactions are fair to, and in the best interests of, the Company and Seller, respectively and have approved and adopted this Agreement and approved the Transactions;
WHEREAS, the Board of Directors of Future Health (the “Future Health Board”) has (a) unanimously approved and adopted this Agreement and approved the payment of the Stock Consideration (as defined herein) to the Seller pursuant to this Agreement and the other transactions contemplated by this Agreement, and (b) has recommended the approval and adoption of this Agreement and the Transactions by the stockholders of Future Health;
WHEREAS, in connection with the Closing (as defined herein), each of Seller and other contributors to be specified, on the one hand, and the Company, on the other, shall enter into Contribution Agreements, in form and substance mutually acceptable to Future Health, Seller and the Company (the “Contribution Agreements”), pursuant to which certain assets of Seller and other contributors, as the case may be, will be contributed or otherwise transferred to the Company prior to the Closing (the “Contributions”), it being acknowledged and agreed that (i) the Intended Tax Free Treatment includes the Contribution Agreements as part of the reorganization described above and, accordingly, tax free treatment would apply to the Contributions and (ii) Seller may determine which contributors shall make contributions to the Company or if contributions should be made to Seller and in turn to the Company;
WHEREAS, it is contemplated that prior to the Closing, Seller’s Board and Seller’s shareholders will adopt a Plan of Liquidation in form and substance mutually acceptable to Future Health, Seller and the Company (the “Plan of Liquidation”), pursuant to which, following the Closing, Seller will wind up and liquidate and distribute the Stock Consideration and Seller’s other assets, if applicable, to its stockholders (the “Liquidation”);
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WHEREAS, Future Health and the Future Health Initial Stockholders (as defined herein), concurrently with the execution and delivery of this Agreement, are entering into the Sponsor Stockholder Support Agreement, dated as of the date hereof (the “Sponsor Stockholder Support Agreement”) substantially in the form attached hereto as Exhibit A, providing that, among other things, the Initial Future Health Stockholders will vote their shares of Future Health Common Stock in favor of this Agreement and the Transactions;
WHEREAS, in connection with the Closing, Future Health, Seller, the Future Health Initial Stockholders and certain other investors shall enter into an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”) substantially in the form attached hereto as Exhibit B;
WHEREAS, the Future Health Initial Stockholders (excluding the persons identified as “Anchor Investors” on Schedule A), the PIPE Investors and the sole stockholder of the Company, concurrently with the execution and delivery of this Agreement, are entering into separate Lock-Up Agreements (each, a “Lock-Up Agreement”) substantially in the form attached hereto as Exhibit C;
WHEREAS, in connection with the Closing, Future Health and Seller shall enter into a separate registration rights agreement with respect to the Earnout Shares in form and substance satisfactory to each of them (the “Earnout Shares Registration Rights Agreement”);
WHEREAS, Future Health, concurrently with the execution and delivery of this Agreement, is entering into (i) a subscription agreement (the “Subscription Agreement”) with a certain investor pursuant to which such investor, upon the terms and subject to the conditions set forth therein, has agreed to purchase shares of Future Health Common Stock at a purchase price of $11.00 per share in a private placement or placements (the “Private Placements”) of $100 million, or such other amount approved by the Company (the “PIPE Commitment”), to be consummated concurrently with the consummation of the transactions contemplated hereby and (ii) a forward purchase agreement (the “Forward Purchase Agreement”), with the purchaser party thereto (the “FPA Investor”), pursuant to which, upon the terms and subject to the conditions set forth therein, among other things, the FPA Investor has agreed to purchase shares of Future Health Common Stock in open market purchases at an aggregate purchase price of $20,000,000 (the “Forward Purchase Shares”) following the execution of this Agreement and prior to the date which is two (2) Business Days prior to the date of special meeting of Future Health’s stockholders called in connection with the Stock Sale (the “Purchase Deadline”); provided, however, that in no event shall the FPA Investor be required to purchase Forward Purchase Shares at a price in excess $11.00 per share and in the event the FPA Investor purchases less than $20,000,000 of Forward Purchase Shares by the Purchase Deadline, the FPA Investor shall purchase from Future Health at the Future Health’s request, a number of shares of Future Health Common Stock (the “Additional Shares”) immediately prior to the Transaction in an amount equal to price set forth in the Forward Purchase Agreement (the Forward Purchase Shares together with the Additional Shares, the “FPA Commitment”); and
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WHEREAS, in connection with the Closing, the Future Health Initial Stockholders shall terminate the Letter Agreement, dated as September 9, 2021, among Future Health and certain initial stockholders (the “Future Health Insider Agreement”).
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
Article I.
DEFINITIONS
Section 1.01 Certain Definitions. For purposes of this Agreement:
“Affiliate” of a specified person means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person; provided that, in no event shall Seller or the Company be considered an affiliate of any portfolio company (other than Seller and its subsidiaries) of any investment fund affiliated with any direct or indirect equity holder of the Company.
“Ancillary Agreements” means the Sponsor Stockholder Support Agreement, the Registration Rights Agreement, the Lock-Up Agreements, the Employment Agreements, the Plan of Liquidation, the Employee Leasing Agreement, the Office Lease Agreement, the Laboratory Services Agreement and all other agreements, certificates and instruments executed and delivered by Future Health, Seller or the Company in connection with the Transactions and specifically contemplated by this Agreement.
“Beneficial Owner” means, with respect to a security, a person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares:
| (i) | voting power, which includes the power to vote, or to direct the voting of, such security; and/or |
| (ii) | investment power, which includes the power to dispose of, or to direct the disposition of, such security. The terms “Beneficially Own” and “Beneficial Ownership” shall have correlative meanings. |
“Business” means the Direct Contracting Entity (“DCE”) business operated by Company which has been approved by the Centers for Medicare & Medicaid Services (“CMS”) to participate in the Global and Professional Direct Contracting Model and, if Company so elects, any Accountable Care Organization (“ACO”) Realizing Equity, Access, and Community Health (“REACH”) Model business of Company approved by CMS.
“Business Data” means all business information and data, including Personal Information (whether of employees, contractors, consultants, customers, consumers, or other persons and whether in electronic or any other form or medium) that is accessed, collected, used, stored, shared, distributed, transferred, disclosed, destroyed, disposed of or otherwise processed by any of the Business Systems or otherwise in the course of the conduct of the business of the Company.
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“Business Day” means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings, or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized to close in New York, NY; provided that banks shall not be deemed to be authorized or obligated to be closed due to a “shelter in place,” “non-essential employee” or similar closure of physical branch locations at the direction of any Governmental Authority if such banks’ electronic funds transfer systems (including for wire transfers) are open for use by customers on such day.
“Business Systems” means all Software, computer hardware (whether general or special purpose), electronic data processing, information, record keeping, databases, communications, telecommunications, networks, interfaces, platforms, servers, peripherals, and computer systems, including any outsourced systems and processes, that are owned or used in the conduct of the business of the Company.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company Articles of Incorporation” means the Articles of Incorporation of the Company dated June 25, 2019, as such may have been amended, supplemented or modified from time to time.
“Company Benefit Plan” means an Employee Benefit Plan which is sponsored, maintained contributed to, or required to be contributed to by the Company or with respect to which the Company has any liability (contingent or otherwise) on behalf of any current or former officer, director, manager, Employee or independent contractor.
“Company Board” means the board of directors of the Company.
“Company Common Stock” means the Company’s common stock, no par value.
“Company IP” means, collectively, all Company-Owned IP and Company-Licensed IP.
“Company Interim Period Convertible Notes” means convertible promissory notes issued by the Company in a Company Permitted Interim Financing, in form and substance mutually acceptable to Future Health, Seller and the Company.
“Company-Licensed IP” means all Intellectual Property rights owned or purported to be owned by a third party and licensed to the Company or to which the Company otherwise has a right to use.
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“Company Material Adverse Effect” means any event, circumstance, change or effect (collectively “Effect”) that, individually or in the aggregate with all other events, circumstances, changes and effects, (a) is reasonably expected to be materially adverse to the business, financial condition, or results of operations of the Company, taken as a whole or (b) would prevent, materially delay or materially impede the performance by the Company of its obligations under this Agreement or the consummation of the Transactions; provided, however, that none of the following shall be deemed to constitute, alone or in combination, or be taken into account in the determination of whether, there has been or will be a Company Material Adverse Effect: (i) any change or proposed change in or change in the interpretation, enforcement or implementation of any Law or GAAP; (ii) events or conditions generally affecting the industries or geographic areas in which the Company operates; (iii) any downturn in general economic conditions, including changes in the credit, debt, securities, financial or capital markets (including changes in interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets); (iv) any geopolitical conditions, outbreak of hostilities, acts of war, sabotage, cyberterrorism, terrorism, military actions, earthquakes, volcanic activity, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, man-made disasters, weather conditions, pandemics, epidemics, disease outbreaks or other public health emergencies (including, without limitation, COVID-19 or any COVID-19 measures) and other force majeure events (including any escalation or general worsening thereof); (v) any actions taken or not taken by Seller or the Company as required by this Agreement or any Transaction Document; (vi) any Effect attributable to the announcement or execution, pendency, negotiation or consummation of the Transactions (including the impact thereof on relationships with customers, suppliers, employees or Governmental Authorities) (provided that this clause (vi) shall not apply to any representations or warranty to the extent the purpose of such representation or warranty is to address the consequences resulting from this Agreement or the consummation of the transactions contemplated hereby); (vii) any failure to meet any projections, forecasts, guidance, estimates, milestones, budgets or financial or operating predictions of revenue, earnings, cash flow or cash position, provided that this clause (vii) shall not prevent a determination that any Effect underlying such failure has resulted in a Company Material Adverse Effect; (viii) any matter of which Future Health is aware on the date hereof; or (ix) any actions taken, or failures to take action, or such other changes or events, in each case, which Future Health has requested or to which it has consented or which actions are contemplated by this Agreement, except in the cases of clauses (i) through (iv), to the extent that the Company is materially disproportionately affected thereby as compared with other participants in the industries in which the Company operates (in which case, only the incremental disproportionate adverse effect may be taken into account in determining whether a Company Material Adverse Effect has occurred).
“Company Organizational Documents” means the Company Articles of Incorporation, and the bylaws of the Company, in each case as amended, modified or supplemented from time to time.
“Company-Owned IP” means all Intellectual Property rights owned or purported to be owned by the Company, including Intellectual Property rights to be transferred to the Company in the Contributions.
“Confidential Information” means any information, knowledge or data concerning the businesses and affairs of the Company or any vendors or customers of the Company or Future Health or its subsidiaries (as applicable) that is not already generally available to the public.
“Continental” means Continental Stock Transfer & Trust Company, Future Health’s escrow and transfer agent.
“control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.
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“Disabling Devices” means Software viruses, time bombs, logic bombs, Trojan horses, trap doors, back doors, or other computer instructions, intentional devices or techniques that are designed to threaten, infect, assault, vandalize, defraud, disrupt, damage, disable, maliciously encumber, hack into, incapacitate, infiltrate or slow or shut down a computer system or any component of such computer system, including any such device affecting system security or compromising or disclosing user data in an unauthorized manner, other than those incorporated by the Company intentionally to protect Company IP from misuse.
“Employee Benefit Plan” means any plan that is an “employee benefit plan” as defined in Section 3(3) of ERISA, any nonqualified deferred compensation plan subject to Section 409A of the Code, bonus, cash incentive or commission, stock purchase, stock option, restricted stock, other equity-based compensation arrangement, performance award, incentive, deferred compensation, retiree medical or life insurance, death or disability benefit, supplemental retirement, severance, retention, transaction, change in control, employment, consulting, fringe benefit, sick pay, paid time off and vacation plans or arrangements or other employee benefit plans, programs, policy, practice or arrangements, whether written or unwritten and whether or not subject to ERISA.
“Employee Leasing Agreement” means an Employee Leasing Agreement between the Company and Connected Care Resources, Inc. or another entity in form and substance mutually acceptable to Future Health, Seller and the Company.
“Employment Agreements” means the Employment Agreements between the Company and each of Sanjay Patil, Brian Gillan, and Desmond Thio, dated as of the date hereof and effective as of the Closing, in form and substance mutually acceptable to Future Health, Seller and the Company.
“Environment” means any ambient air, surface water, drinking water, groundwater, land surface (whether below or above water), subsurface strata, sediment, plant or animal life, and natural resources.
“Environmental Claim” means any claim, judicial or administrative proceeding, investigation or notice by any person, including any Governmental Authority, alleging potential liability (including potential liability for investigatory costs, cleanup or remediation costs, governmental or third party response costs, natural resource damages, property damage, personal injuries, or fines or penalties) based on or resulting from (a) the presence or Release of, or exposure to, any Hazardous Materials at any location, whether or not owned or operated by the Company in violation of Environmental Law, or (b) any violation of Environmental Law.
“Environmental Laws” means any law, statute, ordinance, regulation, order or rule relating to: (a) the Environment, including pollution, contamination, cleanup, preservation, protection and reclamation of the Environment, (b) the protection of human health with respect to, or the exposure of employees or third parties to, any Hazardous Materials, (c) any Release or threatened Release of any Hazardous Materials, including investigation, assessment, testing, monitoring, containment, removal, remediation and cleanup of any such Release or threatened Release, (d) the management of any Hazardous Materials, including the use, labeling, processing, disposal, storage, treatment, transport, or recycling of any Hazardous Materials, or (e) the presence of Hazardous Materials in any building, physical structure, product or fixture.
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“Environmental Permits” means all Permits required under Environmental Laws for the conduct of the business and activities of the Company, as currently conducted.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Future Health Board” means the board of directors of Future Health.
“Future Health Certificate of Incorporation” means the Amended and Restated Future Health Certificate of Incorporation dated September 9, 2021.
“Future Health Closing Price” means, with respect to a Trading Day, the closing price for such Trading Day of one share of Future Health Common Stock on the Trading Market as reported by Bloomberg Financial L.P.
“Future Health Common Stock” means Future Health’s Common Stock, par value $0.0001 per share.
“Future Health Material Adverse Effect” means any event, circumstance, change or effect that, individually or in the aggregate with all other events, circumstances, changes and effects, (a) is reasonably expected to be materially adverse to the business, financial condition or results of operations of Future Health; or (b) would prevent, materially delay or materially impede the performance by Future Health of its obligations under this Agreement or the consummation of the Transactions; provided, however, that none of the following shall be deemed to constitute, alone or in combination, or be taken into account in the determination of whether, there has been or will be a Future Health Material Adverse Effect: (i) any change or proposed change in or change in the interpretation, enforcement or implementation of any Law or GAAP; (ii) events or conditions generally affecting the industries or geographic areas in which Future Health operates; (iii) any downturn in general economic conditions, including changes in the credit, debt, securities, financial or capital markets (including changes in interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets); (iv) any geopolitical conditions, outbreak of hostilities, acts of war, sabotage, cyberterrorism, terrorism, military actions, earthquakes, volcanic activity, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, man-made disasters, weather conditions, pandemics, epidemics, disease outbreaks or other public health emergencies (including, without limitation, COVID-19 or any COVID-19 measures) and other force majeure events (including any escalation or general worsening thereof); (v) any actions taken or not taken by Future Health as required by this Agreement or any Transaction Document; (vi) any Effect attributable to the announcement or execution, pendency, negotiation or consummation of the Transaction (provided that this clause (vi) shall not apply to any representation or warranty to the extent the purpose of such representation or warranty is to address the consequences resulting from this Agreement or the consummation of the transactions contemplated hereby); or (vii) any actions taken, or failures to take action, or such other changes or events, in each case, which Seller or the Company has requested or to which it has consented or which actions are contemplated by this Agreement, except in the cases of clauses (i) through (iii), to the extent that Future Health is materially disproportionately affected thereby as compared with other participants in the industry in which Future Health operates.
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“Future Health Organizational Documents” means the Future Health Certificate of Incorporation, Future Health bylaws, and Trust Agreement (as defined herein) of Future Health, in each case as amended, modified or supplemented from time to time.
“Future Health Units” means one share of Future Health Common Stock and one-half of one Future Health Warrant.
“Future Health Warrant Agreements” means those certain warrant agreements dated September 9, 2021 by and between Future Health and Continental Stock Transfer & Trust Company.
“Future Health Warrants” means whole warrants to purchase shares of Future Health Common Stock as contemplated under the Future Health Warrant Agreements, with each whole warrant exercisable for one share of Future Health Common Stock at an exercise price of $11.50.
“Global and Professional Direct Contracting Model” means the Centers for Medicare & Medicaid Services model implemented under Section 1115A of the Social Security Act, which consists of a set of voluntary payment model options aimed at reducing expenditures and preserving or enhancing quality of care for Medicare fee-for-service beneficiaries through capitated, risk-adjusted monthly payment for services provided by DCE participant and preferred providers with whom the DCE has a written financial arrangement.
“Governmental Reimbursement Program” means, collectively, Medicare, Medicaid and “TRICARE” and any other health care program operated by or financed in whole or in part by any foreign or domestic federal, state or local government, but excluding all non-government funded Third-Party Payor programs.
“Hazardous Materials” means all materials, chemicals, wastes, compounds and substances in any form defined, regulated or characterized as a pollutant, contaminant or toxic or hazardous substance or waste (or terms of similar meaning) under Laws protecting the Environment and human health, including petroleum, crude oil and any fraction thereof.
“Healthcare and Insurance Laws” means all Laws governing, regulating, restricting or relating or pertaining to the operation or management of, or provision, of healthcare goods or services, or the offering, sale, provision, administration or underwriting of any insurance products, contracts of insurance, risk assuming insurance or health care products, accountable care organization arrangements, or other health care networks, health maintenance organization or the billing, coding or payment or administration for healthcare goods or services, including, without limitation, (a) all federal and state fraud and abuse Laws, including, without limitation, the federal Anti-Kickback Statute (42 U.S.C. §1320a-7b(b)), the Stark Law (42 U.S.C. §1395nn), the False Claims Act (42 U.S.C. § 1320a-7b(a), 31 U.S.C. §§3729 et seq.), the federal Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), the federal exclusion Laws (42 U.S.C. § 1320a-7) and other Laws relating to self-referral, anti-kickback, illegal remuneration, fraud and abuse or the defrauding of, or making or presenting of any false claim, false statement or misrepresentation of material facts to, any Governmental Authority reimbursement programs (including Medicare and Medicaid) or other third party payor; (b) HIPAA and Other Privacy Laws; (c) Laws governing patient records and documentation, referrals, quality of care, fee-splitting, equipment and facilities, or licensure and registration of insurance companies, administrator, arrangements, providers of health care items, goods and services; (d) all Laws, policies, procedures, requirements and regulations pursuant to which Healthcare and Insurance Permits are governed, regulated or issued; and (e) any regulations promulgated pursuant to any of the foregoing statutes that address the subject matter of any of the foregoing, each of (a) through (e) as may be amended from time to time.
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“Healthcare and Insurance Permit” means, with respect to any Person, a Permit issued or required under Healthcare and Insurance Laws applicable to the Business or necessary in the possession, ownership, warehousing, marketing, promoting, sale, administration, operation, underwriting, furnishing, distribution or delivery of items, goods products or services under Healthcare and Insurance Laws applicable to the Business.
“Healthcare Provider” means a physician or other health care professional, medical group, independent practice association, hospital or other health care facility, specialty care provider (such as an ophthalmologist, psychiatrist, behavioral health professional and the like), or ancillary service provider (such as a pharmacy benefit manager, laboratory, magnetic resonance imaging service provider and the like).
“HIPAA and Other Privacy Laws” means the Health Insurance Portability and Accountability Act of 1996, as amended, and the Health Information Technology for Economic and Clinical Health Act, all rules and regulations promulgated under such acts, and other Laws regulating, governing or relating to the privacy and/or security of patient, protected health or personally identifiable information.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“Initial Stockholders” means the initial stockholders of Future Health listed on Schedule A hereto.
“Intellectual Property” means: (a) patents, patent applications and patent disclosures, together with all reissues, continuations, continuations-in-part, divisionals, revisions, extensions or reexaminations thereof; (b) trademarks and service marks, trade dress, logos, trade names, corporate names, brands, slogans, and other source identifiers together with all translations, adaptations, derivations, combinations and other variants of the foregoing, and all applications, registrations, and renewals in connection therewith, together with all of the goodwill associated with the foregoing; (c) copyrights, and other works of authorship (whether or not copyrightable), and moral rights, and registrations and applications for registration, renewals and extensions thereof; (d) trade secrets and know-how (including ideas, formulas, compositions, inventions (whether or not patentable or reduced to practice)), customer and supplier lists, improvements, protocols, processes, methods and techniques, research and development information, industry analyses, algorithms, architectures, layouts, drawings, specifications, designs, plans, methodologies, proposals, industrial models, technical data, financial and accounting and all other data, databases, database rights, including rights to use any Personal Information, pricing and cost information, business and marketing plans and proposals, and customer and supplier lists (including lists of prospects) and related information; (e) Internet domain names and social media accounts; (f) rights of privacy and publicity and all other intellectual property or proprietary rights of any kind or description; (g) copies and tangible embodiments of any of the foregoing, in whatever form or medium; and (h) all legal rights arising from items (a) through (f), including the right to prosecute, enforce and perfect such interests and rights to sue, oppose, cancel, interfere, enjoin and collect damages based upon such interests, including such rights based on past infringement, if any, in connection with any of the foregoing.
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“Intercompany Agreements” means the Employee Leasing Agreement, the Laboratory Services Agreement and the Office Lease Agreement.
“Interim Period” means the duration of time between the date of this Agreement and the Closing or the earlier termination of this Agreement.
“knowledge” or “to the knowledge” of a person shall mean in the case of Seller or the Company, as applicable, the actual knowledge of the persons listed on Schedule B after reasonable inquiry (and for all purposes of Section 4.14 hereof, “reasonable inquiry” shall not require Seller or the Company to have conducted patent clearance or similar freedom to operate searches) and in the case of Future Health, the actual knowledge of Bradley A. Bostic and Travis A. Morgan after reasonable inquiry.
“Laboratory Services Agreement” means a Laboratory Services Agreement between the Company and Discovery Genomics, Inc. or another entity, in form and substance mutually acceptable to Future Health, Seller and the Company.
“Leased Real Property” means the real property leased by the Company as tenant, together with, to the extent leased by the Company, all buildings and other structures, facilities or improvements located thereon and all easements, licenses, rights and appurtenances of the Company relating to the foregoing.
“Lien” means any lien, security interest, mortgage, pledge, adverse claim or other encumbrance of any kind that secures the payment or performance of an obligation (other than those created under applicable securities laws).
“Material Healthcare Provider” means one of the twenty (20) largest Healthcare Providers contracted with the Company to participate in the Global and Professional Direct Contracting Model as measured by the total number of Medicare fee-for-service beneficiaries aligned to the DCE through such Healthcare Provider during calendar year 2022.
“Office Lease Agreement” means an Office Lease Agreement between the Company and Excelera Investment I LLC, in form and substance mutually acceptable to Future Health, Seller and the Company.
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“Open Source Software” means any Software that is licensed pursuant to: (a) any license that is a license now or in the future approved by the open source initiative and listed at http://www.opensource.org/licenses, which licenses include all versions of the GNU General Public License (GPL), the GNU Lesser General Public License (LGPL), the GNU Affero GPL, the MIT license, the Eclipse Public License, the Common Public License, the CDDL, the Mozilla Public License (MPL), the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL), and the Sun Industry Standards License (SISL); (b) any license to Software that is considered “free” or “open source software” by the open source foundation or the free software foundation; or (c) any Reciprocal License, in each case whether or not source code is available or included in such license.
“Payor” means any Governmental Reimbursement Program or any insurance company, managed care organization, health or medical plan or program or other third party payor, whether private, commercial or governmental, or any fiscal intermediary or contractor of any of the foregoing.
“PCAOB” means the Public Company Accounting Oversight Board and any division or subdivision thereof.
“PEO” means a professional employer organization, co-employer organization, human resources or benefits outsourcing entity, or similar vendor or provider (including Connected Care Resources, Inc.).
“PEO Plan” means any Employee Benefit Plan which is or has been sponsored or maintained by a PEO under which any current or former officer, director, manager, employee or independent contractor of Companies are receiving benefits in connection with the applicable engagement of such PEO.
“Permits” means all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority.
“Permitted Liens” means: (a) such imperfections of title, easements, encumbrances, Liens or restrictions that do not materially impair the current use of the Company’s assets that are subject thereto; (b) materialmen’s, mechanics’, carriers’, workmen’s, warehousemen’s, repairmen’s, landlord’s and other similar Liens arising in the ordinary course of business, or deposits to obtain the release of such Liens; (c) Liens for Taxes not yet due and payable, or if delinquent, being contested in good faith and for which appropriate reserves have been made in accordance with GAAP; (d) zoning, entitlement, conservation restriction and other land use and environmental regulations promulgated by Governmental Authorities; (e) revocable, non-exclusive licenses (or sublicenses) of Company-Owned IP granted in the ordinary course of business; (f) non-monetary Liens, encumbrances and restrictions on real property (including easements, covenants, rights of way and similar restrictions of record) that do not materially interfere with the uses of such real property as presently conducted by the Company; (g) Liens identified in the Annual Financial Statements; and (h) Liens on leases, subleases, easements, licenses, rights of use, rights to access and rights of way arising from the provisions of such agreements or benefiting or created by any superior estate, right or interest.
“person” means an individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including, without limitation, a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government.
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“Personal Information” means (a) information related to an identified or identifiable individual (e.g., name, address telephone number, email address, financial account number, government-issued identifier), (b) any other data used or intended to be used or which allows one to identify, contact, or precisely locate an individual, including any internet protocol address or other persistent identifier, and (c) any other, similar information or data regulated by Privacy/Data Security Laws.
“Plan of Reorganization” shall have the meaning set forth in Section 7.14(c).
“Privacy/Data Security Laws” means all laws governing the receipt, collection, use, storage, processing, sharing, security, disclosure, or transfer of Personal Information or the security of Company’s Business Systems or Business Data.
“Reciprocal License” means a license of an item of Software that requires or that conditions any rights granted in such license upon: (i) the disclosure, distribution or licensing of any other Software (other than such item of Software as provided by a third party in its unmodified form); (ii) a requirement that any disclosure, distribution or licensing of any other Software (other than such item of Software in its unmodified form) be at no charge; (iii) a requirement that any other licensee of the Software be permitted to access the source code of, modify, make derivative works of, or reverse-engineer any such other Software; (iv) a requirement that such other Software be redistributable by other licensees; or (v) the grant of any patent rights (other than patent rights in such item of Software), including non-assertion or patent license obligations (other than patent obligations relating to the use of such item of Software).
“Redemption Rights” means the redemption rights provided for in Section 9.02 of the Future Health Certificate of Incorporation.
“Registered Intellectual Property” means all Intellectual Property that is the subject of registration (or an application for registration), including domain names.
“Release” means any release, spill, emission, leaking, pumping, emitting, depositing, discharging, injecting, escaping, leaching, dispersing, dumping, pouring, disposing or migrating into, onto or through the Environment.
“Reorganization” shall mean the transactions constituting the purchase and sale of the Purchased Shares, and the Contribution, the Spin-Out and Liquidation and any documents executed or to be executed in connection therewith, including transactions described in Article II, the Contribution Agreements and the Plan of Liquidation.
“Software” means all computer software (in object code or source code format), data and databases, developer materials, including but not limited to pseudo-code, programmer comments, user manuals, platform specifications, compilation environments and related documentation and materials, including any embedded or linked third party software, libraries or databases.
“Spin-Out and Liquidation” means all transactions, steps, actions, aspects and documents involved in the Reorganization that do not directly relate to or involve the Company, including, without limitation, (i) the spin-out of one or more subsidiaries of Seller other than the Company, such that, following such spin-out, the stock or other equity interests of such subsidiaries are held by one or more Affiliates or other subsidiaries of Seller, the stockholders of Seller or some combination thereof, and (ii) the Liquidation, but excluding the Contribution, the Stock Sale and the Intercompany Agreements.
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“Stock Consideration” means 60,000,000 shares of Future Health Common Stock.
“Subsidiary” or “Subsidiaries” of Seller, the Company, Future Health or any other person means an Affiliate controlled by such person, directly or indirectly, through one or more intermediaries.
“Tax” or “Taxes” means (i) any and all taxes (including any duties, levies or other similar governmental assessments in the nature of taxes), including, but not limited to, income, estimated, business, occupation, corporate, capital, gross receipts, transfer, stamp, registration, employment, payroll, unemployment, withholding, occupancy, license, severance, capital, production, ad valorem, excise, windfall profits, customs duties, real property, personal property, sales, use, turnover, value added and franchise taxes, in each case imposed by any Governmental Authority, whether disputed or not, together with all interest, penalties, and additions to tax imposed with respect thereto, and (ii) any liability for amounts of the type described in clause (i) as a result Treasury Regulations Section 1.1502-6, as a result of being a transferee or successor, or as a result of a contract or otherwise.
“Tax Authority” means any Governmental Authority responsible for the imposition of any Tax (U.S. or non-U.S.).
“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto and any amendment thereof, in each case supplied or required to be supplied to a Tax authority.
“Third-Party Payor” means Governmental Reimbursement Programs, Blue Cross and/or Blue Shield, private insurers, managed care plans and any other Person or entity which presently or in the future reimburses or pays providers for healthcare items, goods or services.
“Trading Day” means any day on which the Future Health Common Stock is actually traded on the Trading Market.
“Trading Market” means the Nasdaq Capital Market or such other stock market or exchanges on which the Future Health Common Stock is listed or quoted for trading at the time of determination.
“Transaction Documents” means this Agreement, including all Schedules and Exhibits hereto, the Company Disclosure Schedule, the Ancillary Agreements, and all other agreements, certificates and instruments executed and delivered by Future Health, Seller or the Company in connection with the Transaction and specifically contemplated by this Agreement.
“Transactions” means the transactions contemplated by this Agreement and the Transaction Documents.
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“Treasury Regulations” means the United States Treasury regulations issued pursuant to the Code.
“Virtual Data Room” means the virtual data room established by Seller hosted by Firmex, access to which was given to Future Health in connection with its due diligence investigation of Seller and the Company relating to the transactions contemplated hereby.
Section 1.02 Further Definitions. The following terms have the meaning set forth in the Sections set forth below:
| Defined Term | Location of Definition |
| 2022 Balance Sheet | Section 4.07(b) |
| Action | Section 4.09 |
| Additional Shares | Recitals |
| Agreement | Preamble |
| Annual Financial Statements | Section 4.07(a) |
| Antitrust Laws | Section 7.12(a) |
| Audited Financial Statements | Section 7.16 |
| Blue Sky Laws | Section 4.05(b) |
| Claims | Section 6.03 |
| Closing | Section 2.03 |
| Closing Date | Section 2.03 |
| Closing Stock Consideration | Section 2.02 |
| Company | Preamble |
| Company Board | Recitals |
| Company Disclosure Schedule | Article III |
| Company Employee | Section 4.12(a) |
| Company Interim Securities | Section 6.01(b)(ii) |
| Company Permits | Section 4.06 |
| Company Permitted Interim Financing | Section 6.01(b)(ii) |
| Company Source Code | Section 4.14(j) |
| Confidentiality Agreement | Section 7.03(b) |
| Contingent Worker | Section 4.12(b) |
| Continuing Employees | Section 7.05 |
| Contracting Parties | Section 10.11 |
| Data Security Requirements | Section 4.14(k) |
| DGCL | Recitals |
| Earnout Shares | Section 2.02 |
| ERISA Affiliate | Section 4.11(b) |
| Existing Security Agreements | Section 4.17(a)(vii) |
| Forward Purchase Agreement | Recitals |
| Forward Purchase Shares | Recitals |
| FPA Commitment | Recitals |
| FPA Investment | Section 5.16 |
| FPA Investor | Recitals |
| Future Health | Preamble |
| Future Health Board | Recitals |
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| Defined Term | Location of Definition |
| Future Health Insider Agreement | Recitals |
| Future Health Proposals | Section 7.01(a) |
| Future Health SEC Reports | Section 5.07(a) |
| Future Health Stockholders’ Meeting | Section 7.01(a) |
| GAAP | Section 4.07(a) |
| Governmental Authority | Section 3.03(b) |
| Intended Tax-Free Treatment | Recitals |
| Interim Financial Statements | Section 4.07(b) |
| Law | Section 4.05(a) |
| Lease | Section 4.13(b) |
| Lease Documents | Section 4.13(b) |
| Lock-Up Agreement | Recitals |
| Material Contracts | Section 4.17(a) |
| Material Healthcare Provider | Section 4.19(a) |
| Nonparty Affiliates | Section 10.11 |
| Outside Date | Section 9.01(b) |
| PIPE Commitment | Recitals |
| PIPE Investment | Section 5.16 |
| PIPE Investors | Section 5.16 |
| Plan of Liquidation | Recitals |
| Plans | Section 4.11(a) |
| Private Placements | Recitals |
| Proxy Statement | Section 7.01(a) |
| Purchase Deadline | Recitals |
| Registration Statement | Section 7.01(a) |
| Registration Rights Agreement | Recitals |
| Remedies Exceptions | Section 3.02 |
| Representatives | Section 7.03(a) |
| Reviewed Financial Statements | Section 7.16 |
| SEC | Section 5.07(a) |
| Securities Act | Section 5.07(a) |
| Seller | Preamble |
| Seller Board | Recitals |
| Sponsor Stockholder Support Agreement | Recitals |
| Stock Sale | Recitals |
| Subscription Agreement | Recitals |
| Terminating Company Breach | Section 9.01(e) |
| Terminating Future Health Breach | Section 9.01(f) |
| Trust Account | Section 5.12 |
| Trust Agreement | Section 5.12 |
| Trust Fund | Section 5.12 |
| Trustee | Section 5.12 |
| WARN Act | Section 4.12(d) |
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Section 1.03 Construction.
(a) Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the definitions contained in this agreement are applicable to the other grammatical forms of such terms, (iv) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement, (v) the terms “Article,” “Section,” “Schedule” and “Exhibit” refer to the specified Article, Section, Schedule or Exhibit of or to this Agreement, (vi) the word “including” means “including without limitation,” (vii) the word “or” shall be disjunctive but not exclusive, (viii) references to agreements and other documents shall be deemed to include all subsequent amendments and other modifications thereto and (ix) references to statutes shall include all regulations promulgated thereunder and references to statutes or regulations shall be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation.
(b) The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction shall be applied against any party.
(c) Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day.
(d) All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.
Article II.
PURCHASE AND SALE
Section 2.01 Purchase and Sale. On the terms and subject to the conditions of this Agreement, at the Closing, Seller will sell, assign, transfer, convey and deliver to Future Health, and Future Health will purchase, assume, acquire and accept from Seller, all of Seller’s rights, title and interest in and to the Purchased Shares, in each case, free and clear of any Liens (other than transfer restrictions imposed thereon by applicable securities Law).
Section 2.02 Stock Consideration. The aggregate purchase price to be paid by Future Health in consideration of the Purchased Shares will be the Stock Consideration, payable as follows: (i) 40,000,000 shares of Future Health Common Stock at Closing (“Closing Stock Consideration”) and (ii) 20,000,000 shares of Future Health Common Stock (“Earnout Shares”), which shall be paid in accordance with the terms, and subject to the conditions, set forth in Exhibit D, subject in each case to equitable adjustment for share splits, (including share consolidations), combinations, exchanges, readjustments of shares, or similar transactions, or any stock dividends or distributions paid in shares, reclassifications, share dividends, combinations, recapitalizations and the like (collectively, the “Purchase Price”). At the Closing, Future Health will (i) instruct its transfer agent to cause the Closing Stock Consideration to be accepted into The Depository Trust Company and to be issued (in uncertificated book-entry form) to the Seller to an account or accounts designated in writing by Seller to Future Health at least five (5) Business Days prior to the Closing Date and (ii) enter into mutually satisfactory arrangements with Seller in respect of delivery of the Earnout Shares, if and when they are to be paid. The right to receive the Earnout Shares hereunder shall not be assigned, except in connection with the Plan of Liquidation or as otherwise permitted by Rev. Proc. 84-42.
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Section 2.03 Closing. The closing of the Transactions (the “Closing”) will take place by electronic exchange of deliverables and release of signatures as promptly as practicable, but in no event later than three (3) Business Days, after the satisfaction or, if permissible, waiver of the conditions set forth in Article VIII (other than those conditions that by their nature are to be satisfied at the Closing, it being understood that the occurrence of the Closing shall remain subject to the satisfaction or, if permissible, waiver of such conditions at the Closing), or on such other date or at such other place or time as Seller and Future Health shall mutually agree in writing. The date on which the Closing shall occur is referred to herein as the “Closing Date.”
Section 2.04 Articles of Incorporation; Bylaws.
(a) At the Closing, the Company Articles of Incorporation, as in effect immediately prior to the Closing, shall be amended and restated in its entirety, in form and substance mutually acceptable to Future Health, Seller and the Company and, as so amended and restated, shall be the articles of incorporation of the Company until thereafter amended as provided by applicable Law and such articles of incorporation (subject to Section 7.07).
(b) At the Closing, the bylaws of the Company, as in effect immediately prior to the Closing, shall be amended and restated in their entirety in form and substance mutually acceptable to Future Health, Seller and the Company and, as so amended and restated, shall be the bylaws of the Company until thereafter amended as provided by applicable Law, the articles of incorporation and such bylaws (subject to Section 7.07).
(c) At the Closing, Future Health shall amend and restate, effective as of the Closing, the Future Health Certificate of Incorporation, in form and substance mutually acceptable to Future Health, Seller and the Company.
(d) At the Closing, Future Health shall amend and restate, effective as of the Closing, the Future Health bylaws, in form and substance mutually acceptable to Future Health, Seller and the Company.
Section 2.05 Directors and Officers.
(a) The parties will take all requisite actions such that the directors of the Company and the officers of the Company following the Closing shall be the individuals mutually acceptable to Future Health, Seller and the Company, each to hold office in accordance with the provisions of applicable Law and the articles of incorporation and bylaws of the Company and until their respective successors are, in the case of the initial directors, duly elected or appointed and qualified and, in the case of the initial officers, duly appointed.
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(b) The parties shall cause the Future Health Board and the officers of Future Health following the Closing to be comprised of the individuals mutually acceptable to Future Health, Seller and the Company, each to hold office in accordance with the DGCL and the Future Health Certificate of Incorporation and the bylaws of Future Health and until their respective successors are, in the case of the directors, duly elected or appointed and qualified and, in the case of the officers, duly appointed; provided, however, that (i) immediately following the Closing, the Future Health Board shall consist of 7 members; (ii) Seller has the right to appoint a majority of the members of the Future Health Board, which shall include 3 members of the Future Health Board appointed by Sanjay Patil; (iii) Future Health has the right to appoint 2 members of the Future Health Board; and (iv) the holders of Closing Stock Consideration will enter into a voting agreement for a period of three years following the Closing, pursuant to which they agree to vote all of their shares of Closing Stock Consideration in favor of the appointment of the foregoing individuals as members of the Future Health Board.
Article III.
REPRESENTATIONS AND WARRANTIES REGARDING SELLER
Except as set forth in the disclosure schedule delivered by Seller and the Company pursuant to Section 6.01(c) in connection with this Agreement (the “Company Disclosure Schedule”), Seller and the Company hereby represent and warrant to Future Health as follows as of the date hereof:
Section 3.01 Organization and Qualification. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of California and has the requisite corporate or other organizational power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to have such power, authority and governmental approvals would not be a Company Material Adverse Effect.
Section 3.02 Authority Relative to this Agreement. Seller has all necessary power and authority to execute and deliver this Agreement and each Transaction Document to which it is a party, to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution and delivery by Seller of this Agreement and each Transaction Document to which it is a party, and the consummation by Seller of the Transactions have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of Seller are necessary to authorize this Agreement, each Transaction Document to which Seller is a party or to consummate the Transactions. This Agreement and each Transaction Document to which Seller is a party has been duly and validly executed and delivered by Seller and, assuming the due authorization, execution and delivery by the other parties, constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, by general equitable principles (the “Remedies Exceptions”). To the knowledge of Seller, no state takeover statute is applicable to the Transactions.
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Section 3.03 No Conflict; Required Filings and Consents.
(a) The execution and delivery by Seller of this Agreement and each Transaction Document to which it is a party, does not, and subject to receipt of the consents, approvals, authorizations or permits, filings and notifications, expiration or termination of waiting periods after filings and other actions contemplated by Section 4.05(b) and assuming all other required filings, waivers, approvals, consents, authorizations and notices disclosed in Section 4.05(a) and Section 3.03(a) of the Company Disclosure Schedule and other notifications provided in the ordinary course of business have been made, obtained or given, the performance by Seller of this Agreement and each Transaction Document to which it is a party, will not (i) conflict with or violate any of the organizational documents of Seller, (ii) conflict with or violate any United States or non-United States statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order (“Law”) applicable to Seller or by which any property or asset of Seller is bound or affected, or (iii) result in any breach of or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien (other than any Permitted Lien) on any material property or asset of Seller pursuant to, any material agreement to which Seller is a party, except, with respect to the foregoing clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which are required only in connection with the Spin-Out and Liquidation or which would not have or reasonably be expected to have a Company Material Adverse Effect.
(b) The execution and delivery by Seller of this Agreement and each Transaction Document to which it is a party, does not, and the performance by Seller of this Agreement and each Transaction Document to which it is a party will not, require any consent, approval, authorization or permit of, or filing with or notification to, or expiration or termination of any waiting period by, any United States federal, state, county or local or non-United States government, governmental, regulatory or administrative authority, agency, instrumentality or commission or any court, tribunal, or judicial or arbitral body (a “Governmental Authority”), except (i) for applicable requirements, if any, of the Exchange Act, state securities or “blue sky” laws (“Blue Sky Laws”) and state takeover laws and the notification requirements of the HSR Act, (ii) for approvals, authorizations or permits of, or filings with or notifications to, or expiration or termination of any waiting period by, any Governmental Authority required in connection with the Spin-Out and Liquidation, and (iii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not have or would not reasonably be expected to have a Company Material Adverse Effect. For the avoidance of doubt, “Governmental Authority” shall include, without limitation, any state department of health, state department of insurance, Centers for Medicare and Medicaid Services or agency, branch or other governmental body charged with the responsibility and/or vested with the authority to administer and/or enforce any Healthcare and Insurance Laws.
Section 3.04 Ownership of Purchased Shares. Seller is the sole owner of record of, and has good and valid title to, the Purchased Shares, free and clear of all Liens (other than transfer restrictions imposed thereon by applicable securities Law). Except for the Purchased Shares, no shares or other equity or voting interest of the Company, or options, warrants or other rights to acquire any such shares or other equity or voting interest, of the Company is issued and outstanding. Upon the sale and transfer of the Purchased Shares to Future Health, Seller will convey to Future Health good and valid title to the Purchased Shares, free and clear of all Liens (other than transfer restrictions imposed thereon by applicable securities Law). Seller does not own, of record or beneficially, or have any interest in or right to acquire, any capital stock, equity interests or securities convertible into equity interest of the Company other than the Purchased Shares. Other than this Agreement, and each Transaction Document to which Seller is a party and the Company Organizational Documents, (a) Seller is not a party to any voting trusts, proxies or other agreements or understandings in effect with respect to the acquisition, disposition, voting or transfer of any Purchased Shares, and (b) Seller is not bound by any agreement restricting Seller’s right to dispose of or transfer the Purchased Shares. Seller is not currently the subject of any bankruptcy, reorganization or similar proceeding.
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Section 3.05 Absence of Litigation. Except as set forth in Section 3.05 of the Company Disclosure Schedule, there is no Action pending or, to the knowledge of Seller, threatened against Seller or its subsidiaries, the Company or any property or asset of Seller, including but not limited to the Company, before any Governmental Authority that would reasonably be expected to impact the Reorganization (other than the Spin-Out and the Liquidation). Neither Seller, its subsidiaries, the Company nor any material property or asset of Seller, including but not limited to the Company, is subject to any continuing order of, consent decree, settlement agreement or other similar written agreement with, or, to the knowledge of Seller, continuing investigation by, any Governmental Authority that would reasonably be expected to impact the Seller’s execution of the Plan of Liquidation or the consummation of the Reorganization.
Section 3.06 Corporate Matters.
(a) Following the Contributions and the Closing, the tangible and intangible assets transferred to the Company pursuant to the Contribution Agreements together with obligations owed from the Seller or any of its Affiliates to the Company pursuant to any Transaction Document, will be sufficient for the continued conduct of the Company’s Business following the Closing in substantially the same manner as conducted prior to the Closing and constitute all of the rights, property and assets necessary to conduct the Business as it has been conducted during the first five (5) months of 2022 in the ordinary course, consistent with past practice.
(b) Except as set forth on Section 3.06(b) the Company Disclosure Schedule, none of the shares of Future Health Common Stock issued as the Purchase Price will be used by Seller to pay any obligations of Seller or any of its Affiliates.
Section 3.07 Brokers. Except as set forth on Section 3.07 of the Company Disclosure Schedule, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Seller or the Company. Seller has provided Future Health with a true and complete copy of all contracts, agreements and arrangements including its engagement letter(s), between Seller or the Company and those persons described on Section 3.07 of the Company Disclosure Schedule other than those that have expired or terminated and as to which no further services are contemplated thereunder to be provided in the future.
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Article IV.
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
Except as set forth in Company Disclosure Schedule, Seller and the Company hereby represent and warrant to Future Health as follows as of the date hereof:
Section 4.01 Organization and Qualification; Subsidiaries.
(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of California and has the requisite corporate or other organizational power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to have such power, authority and governmental approvals would not be a Company Material Adverse Effect. The Company is duly qualified or licensed as a foreign corporation or other organization to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that would not individually or in the aggregate be expected to have a Company Material Adverse Effect.
(b) The Company does not directly or indirectly own, and has never owned, any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any other corporation, partnership, joint venture or business association or other entity.
Section 4.02 Articles of Incorporation and Bylaws. The Company has prior to the date of this Agreement made available to Future Health in the Virtual Data Room complete and correct copies of the Company Organizational Documents. The Company Organizational Documents are in full force and effect. The Company is not is in violation of any of the provisions of the Company Organizational Documents.
Section 4.03 Capitalization. Subject to the acceptance by the Secretary of State of the State of California of the Certificate of Correction filed by the Company on June 13, 2022:
(a) As of the date hereof, the authorized capital stock of the Company consists of 1,000 shares of Company Common Stock, of which 1,000 shares of Company Common Stock are issued and outstanding. No shares of Company Common Stock are held in the treasury of the Company.
(b) There are no options, warrants, preemptive rights, calls, convertible securities, conversion rights or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company or obligating the Company to issue or sell any shares of capital stock of, or other equity or voting interests in, or any securities convertible into or exchangeable or exercisable for shares of capital stock, or other equity or other voting interests in, the Company. The Seller is the sole owner of all of the issued and outstanding securities of the Company and there are no other holders of any securities issued by the Company. As of the date hereof, the Company is not a party to, or otherwise bound by, and the Company has not granted, any equity appreciation rights, participations, phantom equity, restricted shares, restricted share units, performance shares, contingent value rights or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other securities or ownership interests in, the Company. There are no voting trusts, voting agreements, proxies, shareholder agreements or other agreements to which the Company is a party or among any holder of Company Common Stock, or any other equity interests or other securities of the Company to which the Company is not a party, with respect to the voting or transfer of the Company Common Stock or any of the equity interests or other securities of the Company. The Company does not own any equity interests in any person.
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(c) There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of the Company or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any person. The Company has not declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital stock.
(d) All shares of Company Common Stock have been issued in compliance with applicable securities laws and other applicable laws and are duly authorized, validly issued, fully paid and non-assessable and will not be subject to, or be issued in violation of, any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar rights. There are no securities or instruments issued by or to which the Company is a party containing anti-dilution or similar provisions that will be triggered by the consummation of the Transactions or the Private Placements, in each case, that have not been or will be waived on or prior to the Closing Date.
Section 4.04 Authority Relative to this Agreement. The Company has all necessary power and authority to execute and deliver this Agreement and the Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder and, to consummate the Transactions. The execution and delivery by the Company of this Agreement and the Transaction Documents to which it is a party and the consummation by the Company of the Transactions have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement, the Transaction Documents to which it is a party, or to consummate the Transactions. This Agreement and the Transaction Documents to which the Company is a party have been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by Future Health, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by the Remedies Exceptions. To the knowledge of the Company, no state takeover statute is applicable to the Transactions.
Section 4.05 No Conflict; Required Filings and Consents.
(a) The execution and delivery by the Company of this Agreement, and the Transaction Documents to which it is a party, do not, and subject to receipt of the consents, approvals, authorizations or permits, filings and notifications, expiration or termination of waiting periods after filings and other actions contemplated by Section 4.05(b) and assuming all other required filings, waivers, approvals, consents, authorizations and notices disclosed in Section 4.05(a) and Section 3.03(a) of the Company Disclosure Schedule and other notifications provided in the ordinary course of business have been made, obtained or given, the performance of this Agreement by the Company will not (i) conflict with or violate the Company Organizational Documents, (ii) conflict with or violate any Law applicable to the Company or by which any property or asset of the Company is bound or affected, or (iii) result in any breach of or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien (other than any Permitted Lien) on any material property or asset of the Company pursuant to, any Material Contract, except, with respect to the foregoing clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which are required only in connection with the Spin-Out and Liquidation or which would not have or reasonably be expected to have a Company Material Adverse Effect.
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(b) The execution and delivery by the Company of this Agreement and the Transaction Documents to which it is a party do not, and the performance by the Company of its obligations under this Agreement and the Transaction Documents to which it is a party will not, require any consent, approval, authorization or permit of, or filing with or notification to, or expiration or termination of any waiting period by, any Governmental Authority, except (i) for applicable requirements, if any, of the Exchange Act, state securities or Blue Sky Laws and state takeover laws and the notification requirements of the HSR Act, (ii) for approvals, authorizations or permits of, or filings with or notifications to, or expiration or termination of any waiting period by, any Governmental Authority required in connection with the Spin-Out and Liquidation and (iii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not have or would not reasonably be expected to have a Company Material Adverse Effect.
Section 4.06 Permits; Compliance. The Company is in possession of all material Permits necessary for the Company to own, lease and operate its properties or to carry on its business as it is now being conducted (the “Company Permits”), except where the failure to have such Company Permits would not reasonably be expected to have a Company Material Adverse Effect. No suspension or cancellation of any of the Company Permits is pending or, to the knowledge of Seller, threatened in writing. Except as set forth in Section 4.06 of the Company Disclosure Schedule, the Company is not in conflict with, or in default, breach or violation of, (a) any Law applicable to the Company or by which any property or asset of the Company is bound or affected, or (b) any Material Contract or Company Permit, except, in each case, for any such conflicts, defaults, breaches or violations that would not have or would not reasonably be expected to have a Company Material Adverse Effect.
Section 4.07 Financial Statements.
(a) The Company has delivered drafts of the unaudited balance sheet of the Company as of December 31, 2021, and the unaudited statement of operations for the year ended December 31, 2021 (collectively, the “Annual Financial Statements”), which are attached as Section 4.07(a) of the Company Disclosure Schedule. The Annual Financial Statements (i) were prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods indicated (except for the omission of footnotes and subject to year-end audit adjustments) and (ii) fairly present, in all material respects, the financial position, results of operations and cash flows of Company as at the date thereof and for the periods indicated therein.
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(b) The Company has delivered drafts of the unaudited balance sheet of the Company as of March 31, 2022 (the “2022 Balance Sheet”) and the unaudited statement of operations for the three months ended March 31, 2022 (collectively, the “Interim Financial Statements”), which are attached as Section 4.07(a) of the Company Disclosure Schedule. The Interim Financial Statements were prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except for the omission of footnotes and subject to year-end adjustments) and fairly present, in all material respects, the financial position, results of operations and cash flows of the Company as at the date thereof and for the period indicated therein, except as otherwise noted therein and subject to normal and recurring year-end adjustments and the absence of notes.
(c) Except as and to the extent set forth on the 2022 Balance Sheet, the Company does not have any liability or obligation of a nature (whether accrued, absolute, contingent or otherwise) required to be reflected on a balance sheet prepared in accordance with GAAP, except for: (i) liabilities that were incurred in the ordinary course of business since April 1, 2022 and that do not involve the incurrence of indebtedness for money borrowed, except for indebtedness permitted in accordance with Section 6.01 hereof, (ii) obligations for future performance under any contract to which the Company is a party or (iii) such other liabilities and obligations which are not, individually or in the aggregate, expected to result in a Company Material Adverse Effect.
(d) Since the Company’s inception, (i) neither the Company nor, to Seller’s knowledge, any director, officer, employee, auditor, accountant or Representative of the Company, has received or otherwise had or obtained knowledge of any complaint, allegation, assertion or claim, whether written or, to the knowledge of Seller, oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or its internal accounting controls, including any such complaint, allegation, assertion or claim that the Company has engaged in accounting or auditing practices in breach of any applicable Laws and (ii) there have been no internal investigations regarding accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the chief executive officer, chief financial officer, general counsel, the Company Board or any committee thereof.
(e) To the knowledge of Seller or the Company, no employee of Seller or the Company has provided or is providing information to any law enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any applicable Law. Neither the Company, nor the Seller, nor, to the knowledge of Seller, any officer, employee, contractor, subcontractor or agent of the Company or Seller has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against an employee of Seller or the Company in the terms and conditions of employment because of any act of such employee described in 18 U.S.C. sec. 1514A(a).
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(f) All accounts receivable of the Company reflected on the 2022 Balance Sheet or arising thereafter have arisen from bona fide transactions in the ordinary course of business consistent with past practices and in accordance with GAAP and are collectible, subject to bad debts reserved in the Interim Financial Statements. To the knowledge of Seller or the Company, such accounts receivables are not subject to valid defenses, setoffs or counterclaims, other than routine credits granted for errors in ordering, shipping, pricing, discounts, rebates, returns in the ordinary course of business and other similar matters. The Company’s reserve for contractual allowances and doubtful accounts is adequate in all material respects and has been calculated in a manner consistent with past practices.
(g) All accounts payable of Company, reflected on the 2022 Balance Sheet or arising thereafter are the result of bona fide transactions in the ordinary course of business and have been paid or are not yet due and payable. Since the date of the 2022 Balance Sheet, the Company has not altered in any material respects its practices for the payment of such accounts payable, including the timing of such payment.
Section 4.08 Absence of Certain Changes or Events. Since December 31, 2020, except as otherwise reflected in the Annual Financial Statements or Interim Financial Statements, or as expressly contemplated by this Agreement (including, without limitation, in connection with the Reorganization), (a) the Company has conducted its business in all material respects in the ordinary course and in a manner consistent with past practice, other than due to any actions taken due to a “shelter in place,” “non-essential employee” or similar direction of any Governmental Authority, (b) the Company has not sold, assigned, transferred, permitted to lapse, abandoned, or otherwise disposed of any right, title, or interest in or to any of its material assets (including Company-Owned IP), other than revocable non-exclusive licenses (or sublicenses) of Company-Owned IP granted in the ordinary course of business, (c) there has not been a Company Material Adverse Effect, and (d) the Company has not taken any action that, if taken after the date of this Agreement, would constitute a material breach of any of the covenants set forth in Section 6.01.
Section 4.09 Absence of Litigation. Except as set forth in Section 4.09 of the Company Disclosure Schedule, there is no material litigation, suit, claim, action, proceeding or investigation by or before any Governmental Authority (an “Action”) pending or, to the knowledge of Seller or the Company, threatened against the Company, or any property or asset of the Company, including any asset or employee that will be implemented in the Business pursuant to the terms of any Transaction Document following the Closing, before any Governmental Authority. Neither the Company nor any material property or asset of the Company, including any asset or employee that will provide services to the Business pursuant to the terms of any Transaction Document following the Closing, is, subject to any continuing order of, consent decree, settlement agreement or other similar written agreement with, or, to the knowledge of Seller or the Company, continuing investigation by, any Governmental Authority, or any order, writ, judgment, injunction, decree, determination or award of any Governmental Authority. Section 4.09 of the Company Disclosure Schedule sets forth a description of each Action that is pending as of the date hereof by or against the Company or any Affiliate of the Seller providing service to the Company following the Closing pursuant to the terms of any Transaction Document.
Section 4.10 Sufficiency of Assets. The tangible and intangible assets to be transferred to the Company pursuant to the Contribution Agreements together with obligations owed from the Seller or any of its Affiliates to the Company pursuant to any Transaction Document, will be sufficient for the continued conduct of the Company’s Business following the Closing in substantially the same manner as conducted prior to the Closing and constitute all of the rights, property and assets necessary to conduct the Business as it has been conducted during the first five (5) months of 2022 in the ordinary course, consistent with past practice.
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Section 4.11 Employee Benefit Plans.
(a) Notwithstanding anything in this Agreement to the contrary, with respect to any Company Benefit Plan that is a PEO Plan, the representations and warranties in this Section 4.11 are made solely with respect to the Company and its ERISA Affiliates participation in such PEO Plan as a participating employer(s) and no representation or warranty is made with respect to any other participating employer in any PEO Plan or to any PEO Plan in its entirety For purposes of this Agreement, “ERISA Affiliate” shall mean any entity that together with the Company would be deemed a “single employer” for purposes of Section 4001(b)(1) of ERISA and/or Sections 414(b), (c) and/or (m) of the Code.
(b) To the knowledge of the Company, each Company Benefit Plan (and each related trust, insurance Contract, or fund) has been maintained, funded and administered in accordance with the terms of such Company Benefit Plan and complies in form and in operation in all material respects with the applicable requirements of ERISA, the Code, and other applicable Laws. No act or omission has occurred and no condition exists with respect to any Company Benefit Plan that would reasonably be expected to subject the Company, its Subsidiaries or their respective ERISA Affiliates to any material fine, penalty, Tax or liability of any kind imposed under ERISA or the Code or other applicable Law.
(c) Neither the Company nor any ERISA Affiliate maintains, sponsors or contributes to, or has or could have any liability under or with respect to, or has within the past six (6) years, under (i) a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA), (ii) a single employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) subject to Section 412 of the Code and/or Title IV of ERISA, (iii) a multiple employer plan subject to Section 413(c) of the Code, or (iv) a multiple employer welfare arrangement under ERISA.
(d) The Company is not and will not be obligated, whether under any Employee Benefit Plan or otherwise, to pay separation, severance, termination or similar benefits to any person directly as a result of any Transaction contemplated by this Agreement, nor will any such transaction accelerate the time of payment or vesting, or increase the amount, of any benefit or other compensation due to any individual. No amount paid or payable by the Company or any of its Affiliates will be classified as an “excess parachute payment” under Section 280G of the Code or in the imposition of an excise Tax under Section 409A or Section 4999 of the Code. Neither the Company nor any Seller has any obligation to “gross-up,” compensate, reimburse, “make-whole,” or otherwise indemnify any individual for the imposition of any Tax under Section 4999 or 409A of the Code.
(e) None of the Employee Benefit Plans provides, nor does the Company have or reasonably expect to have any obligation to provide retiree medical to any current or former employee, officer, director or consultant of the Company after termination of employment or service except as may be required under Section 4980B of the Code and Parts 6 and 7 of Title I of ERISA and the regulations thereunder.
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(f) To the knowledge of the Company, each Employee Benefit Plan (and each related trust, insurance Contract, or fund) has been maintained, funded and administered in accordance with the terms of such Employee Benefit Plan and complies in form and in operation in all material respects with the applicable requirements of ERISA, the Code, and other applicable Laws. No act or omission has occurred and no condition exists with respect to any Employee Benefit Plan that would reasonably be expected to subject the Company, its Subsidiaries or their respective ERISA Affiliates to any material fine, penalty, Tax or liability of any kind imposed under ERISA or the Code or other applicable Law.
(g) No proceeding with respect to any Employee Benefit Plan (other than routine claims for benefits) is pending or, to the Company’s Knowledge, threatened.
Section 4.12 Labor and Employment Matters.
(a) Schedule 4.12 of the Company Disclosure Schedule sets forth a true, correct and complete list of all employees of the Company as of the date hereof (“Company Employees”), including any employee who is on a leave of absence of any nature, authorized or unauthorized, and sets forth for each such individual the following: (i) name; (ii) title or position (including whether full or part time); (iii) employing entity; (iv) hire date; (v) whether paid on a salary, hourly, or commission basis, (vi) current annual base compensation rate paid by the Company or its employing entity; (vii) commission, bonus or other incentive based compensation paid by the Company or its employing entity, and (viii) whether classified as exempt or non-exempt. As of the date hereof, all compensation, including wages, commissions and bonuses, due and payable to all employees of the Company for services performed on or prior to the date hereof have been paid in full (or accrued in full in the Company’s financial statements). For the avoidance of doubt, Company Employees shall also include any employees of an Affiliate providing services to the Company pursuant to an Employee Lease Agreement.
(b) Schedule 4.12(b) of the Company Disclosure Schedule sets forth a true, correct and complete list of all the independent contractors, consultants, temporary employees, leased employees or any other servants or agents performing services with respect to the operation of the business of the Company and classified by the Company as other than a Company Employee or compensated other than through wages paid by the Company through its payroll department and reported on a Form W-2 (“Contingent Workers”), which list is current as of the date hereof and includes any Contingent Worker who has performed services for the Company during the twelve (12) month period immediately preceding such date, and provides for each such Contingent Worker such individual’s role in the business, relationship to the business, fee or compensation arrangements and other contractual terms with the Company.
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(c) (i) Except as set forth on Schedule 4.12(c) of the Company Disclosure Schedule, there are no material Actions pending or, to the knowledge of Seller, threatened against the Company by any current or former Company Employees or Contingent Workers, which Actions would be material to the Company; (ii) the Company is not nor has been for the past five (5) years, a party to, bound by, or negotiating any collective bargaining agreement or other contract with a union, works council or labor organization applicable to persons employed by the Company, nor, to the knowledge of Seller, are there any activities or proceedings of any labor union to organize any such employees; (iii) there are no unfair labor practice complaints pending against the Company before the National Labor Relations Board; and (iv) there has never been, nor, to the knowledge of Seller, has there been any threat of any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar labor disruption or dispute affecting, or, to the knowledge of Seller, threat thereof, by or with respect to any employees of the Company.
(d) To the Company’s knowledge, the Company is, and have at all times been, in compliance in all material respects with all applicable Laws including but not limited to Laws relating to employment, employment practices, employment discrimination, terms and conditions of employment, mass layoffs and plant closings (including the Worker Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any similar state or local Laws), immigration, background checks, meal and rest breaks, classification as exempt/non-exempt for purposes of the Fair Labor Standards Act and analogous laws, classification as independent contractors, pay equity, workers’ compensation, family and medical leave, occupational safety and health requirements, wage and hour, and collective bargaining and the Company is not liable for any arrears of wages, penalties or other sums for failure to comply with any of the foregoing.
(e) (i) The Company is not delinquent in any payments to any Company Employee or Contingent Worker for any wages, salaries, commissions, bonuses, fees or other compensation due with respect to any services performed for it to the date hereof or amounts required to be reimbursed to such Company Employees or Contingent Workers; (ii) there are no, and within the last three (3) years there have been no formal or informal disputes, grievances, complaints or charges with respect to employment or labor matters (including, without limitation, allegations of employment discrimination, sexual or other discriminatory harassment, sexual assault, retaliation or unfair labor practices) pending or threatened against the Company in any judicial, regulatory or administrative forum, under any private dispute resolution procedure or internally; (iii) none of the employment policies or practices of the Company are currently being audited or investigated, or to the knowledge of Seller, subject to imminent audit or investigation by any Governmental Authority; (iv) the Company is not, or within the last three (3) years has not been, subject to any order, decree, injunction or judgment by any Governmental Authority or private settlement contract in respect of any labor or employment matters; and (v) except to the extent applicable with respect to employees covered by the employment agreement set forth on Schedule 4.12(e) of the Company Disclosure Schedule, the Company Employees are at-will and no Company Employee is subject to any contract, expressed or implied, written or oral, with the Company.
(f) Except as set forth on Schedule 4.12(f) of the Company Disclosure Schedule, no Company Employee is on a visa sponsored by the Company which visa will require continued sponsorship. A USCIS Form I-9 has been properly prepared and retained for each Company Employee as required by Law. The Company has no knowledge that any such Form I-9 was improperly prepared or that false documentation was provided in connection with satisfying the requirements of such Form I-9.
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(g) The Company has not, within the past three (3) years, experienced a “plant closing”, “business closing”, or “mass layoff”, as defined in the WARN Act or any similar state, local or foreign Law or regulation affecting any site of employment of the Company or one or more facilities or operating units within any site of employment or facility of the Company, and, during the ninety (90) day period preceding the date hereof, no Company Employee has suffered an “employment loss,” as defined in the WARN Act, with respect to the Company.
(h) Except as set forth on Schedule 4.12(h) of the Company Disclosure Schedule, to the knowledge of Seller, none of the executive officers or management employees of the Company have indicated that they intend to resign or retire as a result of the transactions contemplated by this Agreement.
(i) To the knowledge of Seller, within the last three (3) years: (i) no Company Employee or Contingent Worker has made any allegation of sexual harassment against the Company or against any Company Employee; and (ii) the Company has not entered into any settlement agreements related to allegations of sexual harassment made by a Company Employee or Contingent Worker. To the knowledge of Seller, there is no, and during the last three (3) years there has been no, consensual or non-consensual sexual relationship between: (i) any beneficial owner, officer or executive-level employee of the Company on the one hand, and any current or former Company Employee or Contingent Worker on the other hand; or (ii) between any supervisory employee of the Company on the one hand, and any current or former Company Employee or Contingent Worker within the same reporting structure on the other hand.
(j) To the knowledge of Seller, there have been no workplace accidents, injuries, or exposures in the last twelve (12) months involving any Company Employee which are likely to result in, but have not yet resulted in, a claim for worker’s compensation payments or benefits.
Section 4.13 Real Property; Title to Assets.
(a) The Company does not own any real property.
(b) Section 4.13(b) of the Company Disclosure Schedule lists the street address of each parcel of Leased Real Property, and sets forth a list of each lease, sublease, and license pursuant to which the Company leases, subleases or licenses any real property (each, a “Lease” and the leased property is referred to as “Leased Property”), with the name of the lessor and the date of the Lease in connection therewith and each material amendment to any of the foregoing (collectively, the “Lease Documents”). True, correct and complete copies of all Lease Documents have been made available to Future Health in the Virtual Data Room: (i) other than the Office Lease Agreement and the Lease Documents (if any), there are no leases, subleases, sublicenses, concessions or other contracts granting to the Company the right to use or occupy any real property, and (ii) all such Leases are in full force and effect, are valid and enforceable in accordance with their respective terms, subject to the Remedies Exceptions, and there is not, under any of such Leases, any existing material default or event of default (or event which, with notice or lapse of time, or both, would constitute a default) by the Company or, to Seller’s knowledge, by the other party to such Leases, except as would not, individually or in the aggregate, be material to the Company. The Leased Real Property constitutes all the real property used in, or necessary for, the operation of the Business and is sufficient for the conduct of such business as currently conducted on the date hereof.
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(c) Other than due to any actions taken due to a “shelter in place,” “non-essential employee” or similar direction of any Governmental Authority, there are no contractual or legal restrictions that preclude or restrict the ability of the Company to use any Leased Real Property by such party for the purposes for which it is currently being used, except as would not, individually or in the aggregate, be material to the Company. There are no latent defects or adverse physical conditions affecting the Leased Real Property, and improvements thereon, other than those that would not have a Company Material Adverse Effect.
(d) The Company has legal and valid title to, or, in the case of Leased Real Property and assets, valid leasehold or subleasehold interests in, all of its properties and assets, tangible and intangible, real, personal and mixed, used or held for use in its business, free and clear of all Liens other than Permitted Liens, except as would not, individually or in the aggregate, be material to the Company.
Section 4.14 Intellectual Property.
(a) Section 4.14(a) of the Company Disclosure Schedule contains a true, correct and complete list of all of the following that are owned or purported to be owned by the Company: (i) Registered Intellectual Property and material unregistered trademarks constituting Company-Owned IP (showing in each, as applicable, the filing date, date of issuance, expiration date and registration or application number, and registrar), (ii) all contracts or agreements to use any Company-Licensed IP, including for the Software or Business Systems of any other person (other than unmodified, commercially available, “off-the-shelf” Software with a replacement cost and aggregate annual license and maintenance fees of less than $10,000); and (iii) any Software or Business Systems constituting Company-Owned IP that are material to the business of the Company as currently conducted as of the date hereof. The Company IP constitutes all Intellectual Property rights used in, or necessary for, the operation of the Business and is sufficient for the conduct of such business as currently conducted as of the date hereof.
(b) The Company owns and possesses, free and clear of all Liens (other than Permitted Liens), all right, title and interest in and to the Company-Owned IP and has the right to use, pursuant to a valid and enforceable written license, all Company-Licensed IP. All Company-Owned IP is subsisting and, to the knowledge of Seller, valid and enforceable. No loss or expiration of any of the Company-Owned IP is threatened in writing or pending.
(c) The Company has taken commercially reasonable actions to maintain, protect and enforce Intellectual Property rights, including the secrecy, confidentiality and value of its trade secrets and other Confidential Information, except as would not, individually or in the aggregate, be material to the Company. The Company has not disclosed any trade secrets or other Confidential Information that is material to the Business to any other person, other than pursuant to a written confidentiality agreement under which such other person agrees to maintain the confidentiality and protect such Confidential Information.
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(d) (i) There have been no claims filed and served, or threatened in writing (including email), against the Company, by any person (A) contesting the validity, use, ownership, enforceability, patentability or registrability of any of the Company IP, or (B) alleging any infringement or misappropriation of, or other violation of, any Intellectual Property rights of other persons (including any unsolicited demands or offers to license any Intellectual Property rights from any other person); (ii) the operation of the business of the Company has not and does not infringe, misappropriate or violate, any Intellectual Property rights of other persons; (iii) to Seller’s knowledge, no other person has infringed, misappropriated or violated any of the Company-Owned IP; and (iv) the Company has not received written notice of any of the foregoing or received any formal written opinion of counsel regarding the foregoing. The Company is not a party to or otherwise bound by any settlement or consent agreement, covenant not to sue, non-assertion assurance, release, or other Contract related to the Company’s rights to own, use, make, transfer, encumber, assign, license, distribute, convey, sell, or otherwise exploit the Company IP.
(e) All persons who have contributed, developed or conceived any Company-Owned IP that is material to the Company have executed valid and enforceable written agreements with the Company, substantially in the form made available to Future Health in the Virtual Data Room, and pursuant to which such persons presently assigned to the Company all of their entire right, title, and interest in and to any Intellectual Property created, conceived or otherwise developed by such person in the course of and related to his, her or its relationship with the Company. None of the Company-Owned IP was developed by or on behalf of, or using funding, grants or any other subsidies of, any Governmental Authority or any university, and no government funding, facilities, faculty or students of a university, college, other educational institution or research center or funding from third parties or independent contractors concurrently working for a university, college, other educational institution or research center was used in the development of the Company-Owned IP.
(f) Neither the Company nor, to Seller’s knowledge, any other person is in material breach or in material default of any agreement specified in Section 4.14(a)(ii) of the Company Disclosure Schedule.
(g) Section 4.14(g) of the Company Disclosure Schedule sets forth a list of all Open Source Software that has been used in the business of the Company, and for each such item of Open Source Software: (i) the name and version number of the applicable license; (ii) the distributor or website from which the Open Source Software was obtained; and (iii) the general manner in which such Open Source Software is used in the business of the Company.
(h) The Company does not use and has never used any Open Source Software or any modification or derivative thereof (i) in a manner that would grant or purport to grant to any other person any rights to or immunities under any of the Company IP, or (ii) under any Reciprocal License, to license or provide the source code to any of the Business Systems for the purpose of making derivative works, or to make available for redistribution to any person the source code to any of the Business Systems at no or minimal charge.
(i) The Company owns, leases, licenses, or otherwise has the legal right to use (or to the extent of any Business Systems covered by the Intercompany Agreements, will, at the Closing, own, lease, license or otherwise have the legal right to use) all of the Business Systems, and such Business Systems are sufficient for the current needs of the business of the Company. The Company maintains commercially reasonable disaster recovery, business continuity and risk assessment plans, procedures and facilities. To Seller’s knowledge since inception, there has not been any material failure with respect to any of the Business Systems that has not been remedied or replaced in all material respects.
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(j) Neither the Company nor any other party acting on behalf of the Company has disclosed or delivered to any third party, or permitted the disclosure or delivery by any escrow agent or other party of, any Software or source code constituting Company-Owned IP (“Company Source Code”). No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, require the disclosure or delivery by the Company or any other party acting on behalf of the Company to any third party of any Company Source Code. Neither the execution of the Transaction Documents nor the consummation of any of the Transactions, in and of itself, would reasonably be expected to result in the release of any Company Source Code from escrow.
(k) The Company currently and previously has complied in all material respects with (i) all applicable Privacy/Data Security Laws, (ii) any applicable privacy or other policies of the Company concerning the collection, dissemination, storage or use of Personal Information or other Business Data, and (iii) all contractual commitments that the Company has entered into with respect to privacy and/or data security (collectively, the “Data Security Requirements”). The Company has implemented reasonable data security safeguards designed to protect the security and integrity of the Business Systems and Business Data. The employees and contractors of the Company receive reasonable training on information security issues. To the Company’s knowledge, there is no Disabling Device in any of the Business Systems, except as would not, individually or in the aggregate, be material to the Company. Since inception, the Company has not (x) to Seller’s knowledge, experienced any data security breaches, unauthorized access or use of any of the Business Systems, or unauthorized acquisition, destruction, damage, disclosure, loss, corruption, alteration, or use of any Business Data; or (y) been subject to or received written notice of any audits, proceedings or investigations by any Governmental Authority or any customer, or received any material claims or complaints regarding the collection, dissemination, storage or use of Personal Information, or the violation of any applicable Data Security Requirements, and, to Seller’s knowledge, there is no reasonable basis for the same.
(l) The Company (i) exclusively owns and possesses all right, title and interest in and to the Business Data constituting Company-Owned IP, free and clear of any Liens, other than Liens granted under the Existing Security Agreements or (ii) has the right to use, exploit, publish, reproduce, distribute, license, sell, and create derivative works of the Business Data, in whole or in part, in the manner in which the Company receives and uses such Business Data prior to the Closing Date. The Company is not subject to any contractual requirements, privacy policies, or other legal obligations, including based on the Transactions contemplated hereunder, that would prohibit Future Health from receiving or using Personal Information or other Business Data after the Closing Date, in the manner in which the Company receives and uses such Personal Information and other Business Data prior to the Closing Date or result in liabilities in connection with Data Security Requirements.
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(m) All past and current employees and independent contractors of the Company have executed written obligations in favor of the Company to maintain in confidence all confidential or proprietary information acquired or contributed by them in the course of their employment.
(n) The Company is not, nor has it ever been, a member or promoter of, or a contributor to, any industry standards body or similar standard setting organization that could require or obligate the Company to grant or offer to any other person any license or right to any Company-Owned IP.
Section 4.15 Taxes.
(a) The Company or the Seller: (i) has duly filed all income and other material Tax Returns required to be filed by the Company, and all such filed Tax Returns are true, correct and complete in all material respects; (ii) has paid all Taxes that are required to have been paid by the Company; (iii) has not waived (or requested a waiver of) any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency; and (iv) does not have any deficiency, assessment, claim, audit, examination, investigation, litigation or other proceeding in respect of Taxes or Tax matters pending, asserted, proposed or threatened in writing. The unpaid Taxes of the Company do not (1) as of the date of the Interim Financial Statements materially exceed the reserves for Taxes of the Company set forth in Interim Financial Statements and (2) materially exceed such reserves as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Company in filing its Tax Returns. The Company has made available to Future Health in the Virtual Data Room true, correct and complete copies of the Tax Returns filed by the Company for tax years ended on or after December 31, 2018.
(b) The Company is not a party to, is bound by or has any obligation under any Tax sharing agreement, Tax indemnification agreement, Tax allocation agreement or similar contract or arrangement (including any agreement, contract or arrangement providing for the sharing or ceding of tax credits or losses), nor does the Company have any liability or obligation to any person as a result of or pursuant to any such agreement, contract, or arrangement.
(c) The Company will not be required to include any amount of income in, or exclude any amount of deduction from, taxable income for any Tax period (or portion thereof) ending after the Closing Date as a result of any: (i) adjustment under Section 481 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax law) by reason of a change in method of accounting on or prior to the Closing Date; (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax law) executed on or prior to the Closing Date; (iii) installment sale or open transaction disposition made on or prior to the Closing Date, (iv) intercompany transaction or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax law), (v) prepaid amount received or deferred revenue realized on or prior to the Closing Date, (vi) adjustment under Section 482 of the Code (or any similar provision of applicable state, local or foreign Law), (vii) election under Section 108(i) of the Code made on or before the Closing Date or (vii) application of Section 965 of the Code.
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(d) The Company has withheld and paid to the appropriate Tax authority all Taxes required to have been withheld and paid in connection with amounts paid or owing to any current or former employee, independent contractor, creditor, shareholder or other third party.
(e) The Company has not been a member of an affiliated group filing a consolidated, combined or unitary U.S. federal, state, local or non-U.S. income Tax Return.
(f) The Company does not have any liability for the Taxes of any person (other than the Company) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or non-U.S. law), as a transferee or successor, by contract or otherwise (other than customary Tax provisions in commercial agreements entered into in the ordinary course of business not primarily relating to Taxes).
(g) The Company (i) does not have any request for a ruling in respect of Taxes pending between the Company and any Tax Authority, and (ii) has not entered into any closing agreements, private letter rulings, technical advice memoranda or similar agreements with a Tax Authority.
(h) In the two (2) years prior to the Closing Date, neither the Company nor Seller has distributed stock of another person, or had its stock distributed by another person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 or Section 361 of the Code.
(i) The Company has not engaged in or entered into a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2).
(j) No Tax Authority or agency has asserted in writing or, to the best of the knowledge of Seller, has threatened to assert against the Company any deficiency or claim for any Taxes or interest thereon or penalties in connection therewith.
(k) There are no Tax liens upon any assets of the Company except for liens for Taxes not yet due and payable.
(l) The Company has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. The Company does not have a permanent establishment (within the meaning of an applicable Tax treaty) or an agency, office or fixed place of business or other Tax presence in a country other than the country in which it is organized.
(m) No written claim or, to the knowledge of Seller, no oral claim, has ever been made by a Tax Authority in a jurisdiction in which the Company does not file Tax Returns that the Company is or may be subject to taxation in such jurisdiction.
(n) At all times since its incorporation, the Company has been properly classified as a C corporation within the meaning of Section 1361(a)(2).
(o) The Company is not currently the beneficiary of any extension of time within which to file any Tax Return.
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(p) Section 4.15(p) of the Company Disclosure Schedule sets forth the Company’s place of organization, residence for income, franchise, or similar tax purposes and classification for U.S. federal income Tax purposes.
(q) The Company does not own shares of any controlled foreign corporations as described in Section 957 of the Code or passive foreign investment companies as described in Section 1297 of the Code.
(r) Neither Seller nor the Company, after consultation with their tax advisors, is aware of the existence of any fact, or any action it has taken (or failed to take) or agreed to take, that would reasonably be expected to prevent or impede the Transactions from qualifying for the Intended Tax-Free Treatment. As of the Closing Date, neither Seller nor the Company has taken (or failed to take) or agreed to take any action that would reasonably be expected to prevent or impede the Transactions from qualifying for the Intended Tax-Free Treatment.
Section 4.16 Environmental Matters.
(a) The Company (A) is and has been in compliance in all material respects with applicable Environmental Laws and (B) holds and is and has been in compliance in all material respects with all Environmental Permits; and (ii) all Environmental Permits were validly issued and are in full force and effect, and all applications, notices or other documents have been timely filed to effect timely renewal, issuance or reissuance of such Environmental Permits.
(b) The Company has not been and is not the subject of any Environmental Claim, and no Environmental Claim is pending or, to the knowledge of the Company, threatened against the Company whose liability for the Environmental Claim was or may have been retained or assumed by contract or by operation of Law or pursuant to any order by any Governmental Authority by the Company, except for any such Environmental Claims that have not had and would not reasonably be expected to have individually or in the aggregate, a Company Material Adverse Effect.
(c) No Hazardous Materials are present at, on, under or emanating from any properties or facilities currently leased, operated or used or previously owned, leased, operated or used, in circumstances that would reasonably be expected to form the basis for a material Environmental Claim against, or a requirement for investigation or remediation pursuant to applicable Environmental Law by, the Company, except as would not reasonably be expected to have individually or in the aggregate a Company Material Adverse Effect.
(d) The Company has not Released, disposed of, or arranged to dispose of, any Hazardous Materials in violation of any Environmental Law in a manner, or to a location, that would reasonably be expected to result in a material Environmental Claim, except as would not reasonably be expected to have individually or in the aggregate a Company Material Adverse Effect.
(e) No material Lien imposed by any Governmental Authority having jurisdiction pursuant to any Environmental Law is currently outstanding as to any assets owned, leased or operated by the Company.
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(f) The Company has provided Future Health with copies of all material written environmental, health or safety assessments, audits, investigations, and sampling, monitoring, remediation reports and similar documents in the Company’s possession or, within its control, which were prepared within two (2) years prior to the date hereof, including any material documents relating to the Release or presence of, or exposure to, any Hazardous Materials.
Section 4.17 Material Contracts.
(a) Section 4.17(a) of the Company Disclosure Schedule lists, as of the date of this Agreement, the following types of contracts and agreements to which the Company is a party, excluding for this purpose, any purchase orders submitted by customers (such contracts and agreements as are required to be set forth Section 4.17(a) of the Company Disclosure Schedule along with any Plan listed on Section 4.11(a) of the Company Disclosure Schedule being the “Material Contracts”):
(i) each contract and agreement with consideration paid or payable to the Company of more than $200,000, in the aggregate, over any 12-month period;
(ii) each contract and agreement with suppliers, vendors, carriers or contractors to the Company for expenditures paid or payable by the Company of more than $200,000, in the aggregate, over any 12-month period;
(iii) all broker, distributor, dealer, manufacturer’s representative, franchise, agency, sales promotion, market research, marketing consulting and advertising contracts and agreements to which the Company is a party that are material to the business of the Company;
(iv) all contracts and agreements with any Material Healthcare Provider;
(v) all management contracts (including contracts for employment involving payments in excess of $120,000 per annum) and contracts with consultants and independent contractors involving payments by the Company in excess of $200,000 per annum;
(vi) all bonus and commission plans of the Company, other than with respect to periodic discretionary bonuses payable under offer letters, employment or other agreements with employees issued in the ordinary course;
(vii) all contracts and agreements evidencing indebtedness for borrowed money in an amount greater than $100,000, and any pledge agreements, security agreements or other collateral agreements in which the Company granted to any person a security interest in or lien on any of the property or assets of the Company (such pledge, security and other collateral agreements, the “Existing Security Agreements”);
(viii) all partnership, joint venture or similar agreements;
(ix) all contracts and agreements with any Governmental Authority to which the Company is a party, other than any Company Permits;
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(x) all contracts and agreements that limit, or purport to limit, the ability of the Company to compete in any line of business or with any person or entity or in any geographic area or during any period of time, excluding customary confidentiality agreements and agreements that contain customary confidentiality clauses;
(xi) all contracts or arrangements that result in any person or entity holding a power of attorney from the Company that relates to the Company or its business;
(xii) all leases or master leases of personal property reasonably likely to result in annual payments of $100,000 or more in a 12-month period;
(xiii) all agreements or instruments guarantying the debts or other obligations of any person;
(xiv) all contracts involving use of any Company-Licensed IP required to be listed in Section 4.14(a)(ii) of the Company Disclosure Schedule;
(xv) contracts which involve the license or grant of rights to the Company or to Company-Owned IP by the Company;
(xvi) all contracts or agreements under which the Company has agreed to purchase goods or services from a vendor, supplier or other person on a preferred supplier or “most favored supplier” basis;
(xvii) all contracts or agreements under which the Company has agreed to treat any customer on a “most favored” basis; and
(xviii) agreement for the development of Company-Owned IP for the benefit of the Company (other than employee invention assignment and confidentiality agreements entered into on the Company’s standard form of such agreement made available to Future Health in the Virtual Data Room).
(b) Except as set forth in Section 4.17(b) of the Company Disclosure Schedule, (i) each Material Contract is a legal, valid and binding obligation of the Company and, to the knowledge of Seller, the other parties thereto, and the Company is not in material breach or violation of, or material default under, any Material Contract nor has any Material Contract been canceled by the other party; (ii) to Seller’s knowledge, no other party is in material breach or violation of, or material default under, any Material Contract; (iii) the Company has not received any written, or to the knowledge of Seller, oral claim of default under any such Material Contract; and (iv) each Material Contract with a Material Healthcare Provider is in compliance with all requirements under the Global and Professional Direct Contracting Model. The Company has made available to Future Health in the Virtual Data Room true and complete copies of all Material Contracts, including amendments thereto that are material in nature.
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Section 4.18 Insurance.
(a) Section 4.18(a) of the Company Disclosure Schedule sets forth, with respect to each material insurance policy under which the Company is an insured, a named insured or otherwise the principal beneficiary of coverage as of the date of this Agreement (i) the names of the insurer, the principal insured and each named insured, (ii) the policy number, (iii) the period, scope and amount of coverage and (iv) the premium most recently charged.
(b) With respect to each such insurance policy, except as would not reasonably be expected to result in a Company Material Adverse Effect: (i) the policy is legal, valid, binding and except for policies that have expired under their terms in the ordinary course, enforceable in accordance with its terms (subject to the Remedies Exceptions) and is in full force and effect; (ii) the Company is not in material breach or default (including any such breach or default with respect to the payment of premiums or the giving of notice), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification, under the policy; and (iii) to the knowledge of Seller, no insurer on the policy has been declared insolvent or placed in receivership, conservatorship or liquidation.
Section 4.19 Material Healthcare Providers.
(a) Section 4.19(a) of the Company Disclosure Schedule sets forth a complete and correct list of the Material Healthcare Providers. Except as set forth on Section 4.19(a) of the Company Disclosure Schedule, the Company has not received written or oral notice that any Material Healthcare Provider has cancelled, materially decreased or otherwise materially modified, or intends to cancel, materially decrease or otherwise materially modify, its relationship with the Company.
Section 4.20 Certain Business Practices; Sanctions.
(a) Since inception, neither the Company nor, to Seller’s or the Company’s knowledge, any directors or officers, agents or employees of the Company, has: (a) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity; (b) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (c) made any payment in the nature of criminal bribery.
(b) Neither the Company nor, to Seller’s knowledge, any directors or officers, agents or employees of the Company is, or is owned or controlled by a Person that is (x) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), or (y) located, organized or resident in a country or territory that is the subject of Sanctions or a United States government embargo. Since inception, neither the Company nor, to Seller’s knowledge, any directors or officers, agents or employees of the Company, has knowingly engaged in any dealing or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction was the subject of Sanctions.
(c) Except as set forth on Section 4.20(c) of the Company Disclosure Schedule, the Company is not required to file annual statements and/or quarterly statements with any Governmental Authority, including without limitation agency any state departments of insurance, state departments of health or Centers for Medicare and Medicaid Services. The Company is not required by any applicable Law to prepare and/or file with any Governmental Authority any financial statements on the basis of statutory accounting principles (SAP) or practices.
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Section 4.21 Interested Party Transactions. Except as set forth on Section 4.21 of the Company Disclosure Schedule and except for the Intercompany Agreements and employment relationships and the payment of compensation, benefits and expense reimbursements and advances in the ordinary course of business, no director, officer or other Affiliate of the Company, to Seller’s knowledge, has or has had, directly or indirectly: (a) an economic interest in any person that has furnished or sold, or furnishes or sells, services or products that the Company furnishes or sells, or proposes to furnish or sell; (b) an economic interest in any person that purchases from or sells or furnishes to, the Company, any goods or services; (c) a beneficial interest in any contract or agreement disclosed in Section 4.17(a) of the Company Disclosure Schedule; or (d) any contractual or other arrangement with the Company, other than customary indemnity arrangements; provided, however, that the ownership of no more than five percent (5%) of the outstanding voting stock of a publicly traded corporation shall not be deemed an “economic interest in any person” for purposes of this Section 4.21. The Company has not, since inception, (i) extended or maintained credit, arranged for the extension of credit or renewed an extension of credit in the form of a personal loan to or for any director or executive officer (or equivalent thereof) of the Company, or (ii) materially modified any term of any such extension or maintenance of credit. There are no contracts or arrangements between the Company and any family member of any director, officer or other Affiliate of the Company.
Section 4.22 Exchange Act. The Company is not currently (nor has it previously been) subject to the requirements of Section 12 of the Exchange Act.
Section 4.23 Information Provided for Private Placements and Proxy Statement.
(a) None of the information regarding the Company supplied or to be supplied by Seller or the Company expressly for inclusion or incorporation by reference, if applicable, in the Proxy Statement or Registration Statement (or any amendment or supplement thereto) or any other statement, filing, notice, or application (other than pursuant to the HSR Act) made by or on behalf of Future Health, Seller, the Company or any of their Affiliates in connection with the Transactions, including filings under Rule 425 under the Securities Act, additional soliciting materials, press releases or other communications with shareholders of Future Health will, at the date of filing and/or mailing, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (subject to the qualifications and limitations set forth in the materials provided by Seller or the Company).
(b) None of the information regarding the Company supplied by Seller or the Company expressly for inclusion or incorporation by reference, in the documents in connection with the Private Placements contained, at any time prior to Closing, any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (subject to the qualifications and limitations set forth in the materials provided by the Company).
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Section 4.24 Healthcare and Insurance Laws.
(a) Except as set forth on Section 4.24(a) of the Company Disclosure Schedule, the Company is in compliance in all material respects with all applicable Healthcare and Insurance Laws and, within the past three (3) years, the Company has not violated in any material respect any applicable Healthcare and Insurance Law. Without limiting the generality of the foregoing, the Company has not received written notice of any material violation (or of any inspection, review, investigation, audit, or other proceeding involving allegations of any material violation) of any Healthcare and Insurance Laws, and no such inspection, review, investigation, inspection, audit or other proceeding involving allegations of any such violation is pending or, to the knowledge of Seller, is threatened. The Company has not received or been served in the past three (3) years with any search warrant, subpoena, civil investigative demand, contact letter or other written notice from any Governmental Authority alleging or relating to any alleged material violation by the Company of any applicable Healthcare and Insurance Law.
(b) Except as set forth on Section 4.24(b) of the Company Disclosure Schedule, the Company does not submit any bill or invoice directly or indirectly through any third party billing arrangement or receive payment or reimbursement from any Governmental Reimbursement Program.
(c) Except as set forth on Section 4.24(c) of the Company Disclosure Schedule, the Company does not provide any services as a Payor or has issued or arranged for, or makes or has made any payment or reimbursement pursuant to or in connection with any policy or contract of insurance, including without limitation any HMO, PPO or indemnity product.
(d) Except as set forth on Section 4.24(d) of the Company Disclosure Schedule, the Company is in compliance in all material respects with HIPAA and Other Privacy Laws. The Company has not, within the past five (5) years, to the knowledge of Seller suffered any breach of unsecured protected health information, received any notice from the Office of Civil Rights of the U.S. Department of Health and Human Services or any other Governmental Authority regarding any allegation regarding its failure to comply with HIPAA and Other Privacy Laws, nor made any notification of such breach or failure to any Person, the media or the Secretary of the U.S. Department of Health and Human Services pursuant to HIPAA and Other Privacy Laws.
(e) Neither the Company nor, to the knowledge of Seller any of its shareholders, directors, officers, or any other Person with a “direct or indirect ownership interest” (as that phrase is defined in 42 C.F.R. § 420.201) in the Company, (i) is subject to or has had a civil monetary penalty assessed against him, her or it pursuant to 42 U.S.C. § 1320a-7a or is the subject of a proceeding seeking to assess such penalty; (ii) is or has been excluded, debarred or suspended (A) from participation in any Governmental Reimbursement Program, other Payor plan or program, or any federal or state governmental procurement or non-procurement program or (B) from doing any business with or for any Governmental Authority; (iii) has been convicted of any criminal offenses: (A) relating to the delivery of an item or service under any Governmental Reimbursement Program or other Payor plan or program, fraud, theft, embezzlement, breach of fiduciary responsibility or other financial misconduct in connection with the delivery of a healthcare item or service or with respect to any act or omission under any Governmental Reimbursement Program or other Payor plan or program, or interference with or obstruction of any investigation into any criminal offense or (B) by any Governmental Authority relating to any Healthcare and Insurance Law; (iv) subject to any order, judgment, decree or ruling of, or any criminal, civil or administrative fine, assessment or penalty imposed by, any Governmental Authority with respect to any Governmental Reimbursement Program or any Healthcare and Insurance Law; (v) has been involved or personally named in a U.S. Attorney complaint made or any other action taken pursuant to the federal False Claims Act under 31 U.S.C. §§ 3729-3731 or qui tam action brought pursuant to 31 U.S.C. § 3729 et seq. (other than by reason of a sealed complaint of which Seller may have no knowledge); or (vi) is or was a party to any corporate integrity agreement, deferred prosecution agreement or similar agreement, or subject to any reporting obligations relating to the provision of any healthcare goods or services or the payment therefor pursuant to any settlement agreement, with the Office of Inspector General of the U.S. Department of Health and Human Services, U.S. Department of Justice or other Governmental Authority, nor is any of the foregoing pending or, to the knowledge of Seller, threatened.
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(f) Except as set forth on Section 4.24(f) of the Company Disclosure Schedule, the Company is not a party to or bound by any contract with any Governmental Authority (“Government Contract”) regarding the provision or payment of or insurance for any health care items, goods or services or with respect to any Healthcare and Insurance Law. With respect to each Government Contract, (i) except as set forth on Section 4.24(f)(i) of the Company Disclosure Schedule, the Company is not required to pay, provide, or arrange for any person to pay or provide, any security, bond, letter or credit, escrow, property or other financial collateral or guaranty, for or with respect to any Government Contract; (ii) each Government Contract is a legal, valid and binding obligation of the Company and, to the knowledge of Seller, the other parties thereto, and the Company is not in material breach or violation of, or material default under, any Government Contract nor has any Government Contract been canceled by the other party; (iii) to Seller’s knowledge, no other party is in material breach or violation of, or material default under, any Government Contract; and (iv) the Company has not received any written, or to the knowledge of the Company, oral claim of default under any such Government Contract.
Section 4.25 Healthcare and Insurance Permits.
(a) The Company has been duly granted and possesses the Healthcare and Insurance Permits set forth on Section 4.25(a) of the Company Disclosure Schedule, setting forth with respect to each such Healthcare and Insurance Permit, the issuing agency, brief description of such Healthcare and Insurance Permit and its expiration date.
(b) No such Healthcare and Insurance Permits will be invalidated as a result of the consummation of the transactions contemplated by this Agreement. The Company is in compliance in all material respects with all Healthcare and Insurance Permits held by it. All fees and charges with respect to such Healthcare and Insurance Permits as of the date hereof have been paid in full.
(c) No other material Healthcare and Insurance Permit is necessary for the lawful conduct of the Business as currently operated. No event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse, limitation or cancellation of any Healthcare and Insurance Permit.
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(d) The Company has, with respect to the Healthcare and Insurance Permits held by it, timely made or filed, or caused to be made or filed, all material declarations, applications and filings with, all applicable Governmental Authorities and Governmental Reimbursement Programs and other Payor programs in which it participates, all self-regulatory authorities and all courts and other tribunals necessary to engage, respectively, in the management or operation of, or provision of any its items, goods, products or services.
Section 4.26 Exclusivity of Representations and Warranties. Except as otherwise expressly provided in this Article IV (as modified by the Company Disclosure Schedule), the Company hereby expressly disclaims and negates, any other express or implied representation or warranty whatsoever (whether at Law or in equity) with respect to the Company, its Affiliates, and any matter relating to any of them, including their affairs, the condition, value or quality of their assets, liabilities, financial condition or results of operations, or with respect to the accuracy or completeness of any other information made available to Future Health, its Affiliates or any of their respective Representatives by, or on behalf of, the Company, and any such representations or warranties are expressly disclaimed. Without limiting the generality of the foregoing, except as expressly set forth in this Agreement (as modified by the Company Disclosure Schedule) or in any certificate delivered by the Company pursuant to this Agreement, neither Company nor any other person on behalf of Company has made or makes, any representation or warranty, whether express or implied, with respect to any projections, forecasts, estimates or budgets made available to Future Health, its Affiliates or any of their respective Representatives of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Company (including the reasonableness of the assumptions underlying any of the foregoing), whether or not included in any management presentation or in any other information made available to Future Health, its Affiliates or any of their respective Representatives or any other person, and any such representations or warranties are expressly disclaimed.
Article V.
REPRESENTATIONS AND WARRANTIES OF FUTURE HEALTH
Except as set forth in the Future Health SEC Reports (to the extent the qualifying nature of such disclosure is readily apparent from the content of such Future Health SEC Reports, but excluding disclosures referred to in “Forward-Looking Statements”, “Risk Factors” and any other disclosures therein to the extent they are of a predictive or cautionary nature or related to forward-looking statements) (it being acknowledged that nothing disclosed in such a Future Health SEC Report will be deemed to modify or qualify the representations and warranties set forth in Section 5.01 (Corporate Organization), Section 5.03 (Capitalization) and Section 5.04 (Authority Relative to This Agreement)), Future Health hereby represents and warrants to the Company as follows as of the date hereof:
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Section 5.01 Corporate Organization.
(a) Future Health is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite corporate power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to have such power, authority and governmental approvals would not be a Future Health Material Adverse Effect. Future Health is not required to be qualified or licensed as a foreign corporation in any jurisdiction other than the jurisdiction of its incorporation, except where the failure to be so qualified or licensed would not reasonably be expected to be a Future Health Material Adverse Effect.
(b) Future Health does not directly or indirectly own any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any corporation, partnership, joint venture or business association or other person.
Section 5.02 Organizational Documents. Future Health has heretofore furnished to the Company complete and correct copies of the Future Health Organizational Documents. The Future Health Organizational Documents are in full force and effect. Future Health is not in violation of any of the provisions of the Future Health Organizational Documents.
Section 5.03 Capitalization.
(a) The authorized capital stock of Future Health consists of (i) 500,000,000 shares of Future Health Common Stock and (ii) 5,000,000 shares of preferred stock, par value $0.0001 per share (“Future Health Preferred Stock”). As of the date of this Agreement, (i) 25,000,000 shares of Future Health Common Stock are issued and outstanding (which includes 20,000,000 shares of Future Health Common Stock subject to Redemption Rights), all of which are validly issued, fully paid and non-assessable and not subject to any preemptive rights, (ii) no shares of Future Health Common Stock are held in the treasury of Future Health, (iii) 17,375,000 Future Health Warrants are issued and outstanding, and (iv) 17,375,000 shares of Future Health Common Stock are reserved for future issuance pursuant to the Future Health Warrants. As of the date of this Agreement, there are no shares of Future Health Preferred Stock issued and outstanding. Each Future Health Warrant is exercisable for one share of Future Health Common Stock at an exercise price of $11.50.
(b) All outstanding Future Health Units, shares of Future Health Common Stock and Future Health Warrants have been issued and granted in compliance with all applicable securities laws and other applicable Laws and were issued free and clear of all Liens, other than transfer restrictions under applicable securities laws and the Future Health Organizational Documents and are non-assessable and are not subject to, nor have been issued in violation of, any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar rights.
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(c) The Closing Stock Consideration being delivered, and any Earnout Shares to be issued, by Future Health hereunder shall be duly and validly issued, fully paid and nonassessable, and each such share or other security shall be issued free and clear of preemptive rights and all Liens, other than transfer restrictions under applicable securities laws and the Future Health Organizational Documents. The Closing Stock Consideration, and any Earnout Shares to be issued, will be issued in compliance with all applicable securities Laws and other applicable Laws and without contravention of any other person’s rights therein or with respect thereto.
(d) Except for securities issued pursuant to the Subscription Agreement, securities issued by Future Health as permitted by this Agreement and the Future Health Warrants, Future Health has not issued any options, warrants, preemptive rights, calls, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of Future Health or obligating Future Health to issue or sell any shares of capital stock of, or other equity interests in, Future Health. All shares of Future Health Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and non-assessable and will not be subject to, or be issued in violation of, any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar rights. Neither Future Health nor any subsidiary of Future Health is a party to, or otherwise bound by, and neither Future Health nor any subsidiary of Future Health has granted, any equity appreciation rights, participations, phantom equity or similar rights. Except for the Sponsor Stockholder Support Agreement and the Future Health Insider Agreement between Future Health and the Initial Future Health Stockholders, Future Health is not a party to any voting trusts, voting agreements, proxies, shareholder agreements or other agreements with respect to the voting or transfer of Future Health Common Stock or any of the equity interests or other securities of Future Health or any of its subsidiaries. The Future Health Warrants have been validly issued, and constitute valid and binding obligations of Future Health, enforceable against Future Health in accordance with their terms, subject to the Remedies Exceptions. There are no outstanding contractual obligations of Future Health to repurchase, redeem or otherwise acquire any shares of Future Health Common Stock. There are no outstanding contractual obligations of Future Health to make any investment (in the form of a loan, capital contribution or otherwise) in, any person.
(e) Except as set forth on Schedule 5.03(e) of the disclosure schedule delivered by Future Health to the Seller and the Company in connection with this Agreement (“Future Health Disclosure Schedule”), there are no securities or instruments issued by or to which Future Health or any Future Health Initial Stockholder is a party containing anti-dilution or similar provisions that will be triggered by the consummation of the Transactions or the Private Placements, in each case, that have not been or will be waived on or prior to the Closing Date.
Section 5.04 Authority Relative to This Agreement. Future Health has all necessary power and authority to execute and deliver this Agreement and each Transaction Document to which it is a party, to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution and delivery by Future Health of this Agreement and each Transaction Document to which it is a party, and the consummation by Future Health of the Transactions, have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of Future Health are necessary to authorize this Agreement or to consummate the Transactions (other than (a) the approval and adoption of this Agreement by the holders of a majority of the then-outstanding shares of Future Health Common Stock, and (b) with respect to the issuance of Future Health Common Stock and the amendment and restatement of the Future Health Certificate of Incorporation pursuant to this Agreement, the approval of a majority of the then-outstanding shares of Future Health Common Stock). This Agreement, and each Transaction Document to which Future Health is a party, has been duly and validly executed and delivered by Future Health and, assuming due authorization, execution and delivery by the Company, constitutes a legal, valid and binding obligation of Future Health, enforceable against Future Health in accordance with its terms subject to the Remedies Exceptions.
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Section 5.05 No Conflict; Required Filings and Consents.
(a) Assuming that all consents, approvals, authorizations, expiration or termination of waiting periods and other actions described in Section 5.05(b) have been obtained and all filings and obligations described in Section 5.05(b) have been made, the execution and delivery by Future Health of this Agreement and each Transaction Document to which it is a party do not, and the performance of this Agreement by Future Health will not, (i) conflict with or violate the Future Health Organizational Documents, (ii) conflict with or violate any Law, rule, regulation, order, judgment or decree applicable to each of Future Health or by which any of its property or assets is bound or affected, or (iii) result in any breach of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any property or asset of Future Health pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Future Health is a party or by which Future Health or any of its property or assets is bound or affected, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not have or reasonably be expected to have a Future Health Material Adverse Effect.
(b) The execution and delivery by Future Health of this Agreement and each Transaction Document to which it is a party do not, and the performance of this Agreement by Future Health will not, require any consent, approval, authorization or permit of, or filing with or notification to, or expiration or termination of any waiting period by, any Governmental Authority, except (i) for applicable requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover laws and the notification requirements of the HSR Act, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, prevent or materially delay consummation of any of the Transactions or otherwise prevent Future Health from performing its material obligations under this Agreement and each Transaction Document to which Future Health is a party.
Section 5.06 Compliance. Future Health is not and has not been in conflict with, or in default, breach or violation of, (a) any Law applicable to Future Health or by which any property or asset of Future Health is bound or affected, or (b) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Future Health is a party or by which Future Health or any property or asset of Future Health is bound, except, in each case, for any such conflicts, defaults, breaches or violations that would not have or reasonably be expected to have a Future Health Material Adverse Effect. Future Health is in possession of all material franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary for Future Health to own, lease and operate its properties or to carry on its business as it is now being conducted.
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Section 5.07 SEC Filings; Financial Statements; Sarbanes-Oxley.
(a) Future Health has filed all forms, reports, schedules, statements and other documents, including any exhibits thereto, required to be filed by it with the Securities and Exchange Commission (the “SEC”) since September 9, 2021, together with any amendments, restatements or supplements thereto (collectively, the “Future Health SEC Reports”). Future Health has heretofore furnished to the Company true and correct copies of all amendments and modifications that have not been filed by Future Health with the SEC to all agreements, documents and other instruments that previously had been filed by Future Health with the SEC and are currently in effect. As of their respective dates, the Future Health SEC Reports (i) complied in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act and the Sarbanes-Oxley Act, and the rules and regulations promulgated thereunder, and (ii) did not, at the time they were filed, or, if amended, as of the date of such amendment, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, in the case of any Future Health SEC Report that is a registration statement, or include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in the case of any other Future Health SEC Report. Each director and executive officer of Future Health has filed with the SEC on a timely basis all documents required with respect to Future Health by Section 16(a) of the Exchange Act and the rules and regulations thereunder.
(b) Each of the financial statements (including, in each case, any notes thereto) contained in the Future Health SEC Reports was prepared in accordance with GAAP (applied on a consistent basis) and Regulation S-X and Regulation S-K, as applicable, throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of unaudited financial statements, as permitted by Form 10-Q of the SEC) and each fairly presents, in all material respects, the financial position, results of operations, changes in stockholders equity and cash flows of Future Health as at the respective dates thereof and for the respective periods indicated therein, (subject, in the case of unaudited statements, to normal and recurring year-end adjustments which have not had, and would not reasonably be expected to individually or in the aggregate be material). Future Health has no off-balance sheet arrangements that are not disclosed in the Future Health SEC Reports. No financial statements other than those of Future Health are required by GAAP to be included in the consolidated financial statements of Future Health.
(c) Except as and to the extent set forth in the Future Health SEC Reports, Future Health does not have any liability or obligation of a nature (whether accrued, absolute, contingent or otherwise) required to be reflected on a balance sheet prepared in accordance with GAAP, except for liabilities and obligations arising in the ordinary course of Future Health’s business.
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(d) Future Health is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of Nasdaq.
(e) Future Health has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to Future Health and other material information required to be disclosed by Future Health in the reports and other documents that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to Future Health’s principal executive officer and its principal financial officer as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. Such disclosure controls and procedures are effective in timely alerting Future Health’s principal executive officer and principal financial officer to material information required to be included in Future Health’s periodic reports required under the Exchange Act.
(f) Future Health maintains systems of internal control over financial reporting that are sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including policies and procedures sufficient to provide reasonable assurance: (i) that Future Health maintains records that in reasonable detail accurately and fairly reflect, in all material respects, its transactions and dispositions of assets; (ii) that transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP; (iii) that receipts and expenditures are being made only in accordance with authorizations of management and its board of directors; and (iv) regarding prevention or timely detection of unauthorized acquisition, use or disposition of its assets that could have a material effect on its financial statements. Future Health has delivered to the Company a true and complete copy of any disclosure (or, if unwritten, a summary thereof) by any representative of Future Health to Future Health’s independent auditors relating to any material weaknesses in internal controls and any significant deficiencies in the design or operation of internal controls that would adversely affect the ability of Future Health to record, process, summarize and report financial data. Future Health has no knowledge of any fraud or whistle-blower allegations, whether or not material, that involve management or other employees or consultants who have or had a significant role in the internal control over financial reporting of Future Health. Since September 9, 2021, there have been no material changes in Future Health’s internal control over financial reporting.
(g) There are no outstanding loans or other extensions of credit made by Future Health to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of Future Health has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.
(h) Neither Future Health (including any employee thereof) nor Future Health’s independent auditors has identified or been made aware of (i) any significant deficiency or material weakness in the system of internal accounting controls utilized by Future Health, (ii) any fraud, whether or not material, that involves Future Health’s management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by Future Health or (iii) any claim or allegation regarding any of the foregoing.
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(i) As of the date hereof, there are no outstanding SEC comments from the SEC with respect to the Future Health SEC Reports. To the knowledge of Future Health, none of the Future Health SEC Reports filed on or prior to the date hereof is subject to ongoing SEC review or investigation as of the date hereof.
Section 5.08 Absence of Certain Changes or Events. Since September 9, 2021 and prior to the date of this Agreement, except as expressly contemplated by this Agreement, (a) Future Health has conducted its business in all material respects in the ordinary course and in a manner consistent with past practice, other than due to any actions taken due to a “shelter in place,” “non-essential employee” or similar direction of any Governmental Authority, (b) Future Health has not sold, assigned, transferred, permitted to lapse, abandoned, or otherwise disposed of any right, title, or interest in or to any of its material assets, (c) there has not been a Future Health Material Adverse Effect, and (d) Future Health has not taken any action that, if taken after the date of this Agreement, would constitute a material breach of any of the covenants set forth in Section 6.02.
Section 5.09 Absence of Litigation. There is no Action pending or, to the knowledge of Future Health, threatened against Future Health, or any property or asset of Future Health, before any Governmental Authority. Neither Future Health nor any material property or asset of Future Health is subject to any continuing order of, consent decree, settlement agreement or other similar written agreement with, or, to the knowledge of Future Health, continuing investigation by, any Governmental Authority.
Section 5.10 Board Approval; Vote Required.
(a) The Future Health Board, by resolutions duly adopted by majority vote of those voting at a meeting duly called and held and not subsequently rescinded or modified in any way, has duly (i) determined that this Agreement and each Transaction Document to which Future Health is a party, and the transactions contemplated by this Agreement are fair to and in the best interests of Future Health and its stockholders, (ii) approved this Agreement and the transactions contemplated by this Agreement and declared their advisability, (iii) recommended that the stockholders of Future Health approve and adopt this Agreement and the Transactions, and directed that this Agreement and the Transactions be submitted for consideration by the stockholders of Future Health at the Future Health Stockholders’ Meeting.
(b) The only vote of the holders of any class or series of capital stock of Future Health necessary to approve this Agreement and the transactions contemplated hereby is the affirmative vote of the holders of a majority of the outstanding shares of Future Health Common Stock voting together as a single class.
Section 5.11 Brokers. Other than Cantor Fitzgerald & Co., BTIG, LLC and Roth Capital Partners, LLC, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Future Health. Future Health has provided the Company with a true and complete copy of all outstanding contracts, agreements and arrangements (including engagement letters) with Cantor Fitzgerald & Co., BTIG, LLC and Roth Capital Partners, LLC.
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Section 5.12 Future Health Trust Fund. As of the date of this Agreement, Future Health has no less than $201,000,000 in the trust fund established by Future Health for the benefit of its public stockholders (the “Trust Fund”) maintained in a trust account at J.P. Morgan Chase Bank, N.A. (the “Trust Account”). The monies of such Trust Account are invested in United States Government securities or money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, and held in trust by Continental Stock Transfer & Trust Company (the “Trustee”) pursuant to the Investment Management Trust Agreement, dated as of September 9, 2021, between Future Health and the Trustee (the “Trust Agreement”). The Trust Agreement has not been amended or modified and is valid and in full force and effect and is enforceable in accordance with its terms, subject to the Remedies Exceptions. Future Health has complied in all material respects with the terms of the Trust Agreement and is not in breach thereof or default thereunder and there does not exist under the Trust Agreement any event which, with the giving of notice or the lapse of time, would constitute such a breach or default by Future Health or the Trustee. There are no separate contracts, agreements, side letters or other understandings (whether written or unwritten, express or implied): (i) between Future Health and the Trustee that would cause the description of the Trust Agreement in the Future Health SEC Reports to be inaccurate in any material respect; or (ii) to the knowledge of Future Health, that would entitle any person (other than stockholders of Future Health who shall have elected to redeem their shares of Future Health Common Stock pursuant to the Future Health Organizational Documents) to any portion of the proceeds in the Trust Account. Prior to the Closing, none of the funds held in the Trust Account may be released except: (A) to pay income and franchise taxes from any interest income earned in the Trust Account; and (B) upon the exercise of Redemption Rights in accordance with the provisions of the Future Health Organizational Documents. As of the date hereof, there are no Actions pending or, to the knowledge of Future Health, threatened in writing with respect to the Trust Account. Upon consummation of the Transactions and notice thereof to the Trustee pursuant to the Trust Agreement, Future Health shall cause the Trustee to, and the Trustee shall thereupon be obligated to, release to Future Health as promptly as practicable, the Trust Funds in accordance with the Trust Agreement at which point the Trust Account shall terminate; provided, however that the liabilities and obligations of Future Health due and owing or incurred at or prior to the Closing shall be paid as and when due, including all amounts payable (a) to stockholders of Future Health who shall have exercised their Redemption Rights, (b) with respect to filings, applications and/or other actions taken pursuant to this Agreement required under Law, (c) to the Trustee for fees and costs incurred in accordance with the Trust Agreement; and (d) to third parties (e.g., professionals, printers, etc.) who have rendered services to Future Health in connection with its efforts to effect the Transactions. As of the date hereof, assuming the accuracy of the representations and warranties of the Company herein and the compliance by the Company with its respective obligations hereunder, Future Health has no reason to believe that any of the conditions to the use of funds in the Trust Account will not be satisfied or funds available in the Trust Account will not be available to Future Health at the Closing.
Section 5.13 Employees. Other than any officers as described in the Future Health SEC Reports, Future Health has never employed any employees or retained any contractors, other than consultants and advisors in the ordinary course of business. Other than reimbursement of any out-of-pocket expenses incurred by Future Health’s officers and directors in connection with activities on Future Health’s behalf in an aggregate amount not in excess of the amount of cash held by Future Health outside of the Trust Account, Future Health has no unsatisfied material liability with respect to any employee, officer or director. Future Health has never and does not currently maintain, sponsor, contribute to or have any direct or material liability under any Employee Benefit Plan.
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Section 5.14 Taxes.
(a) Future Health (i) has duly filed all Tax Returns required to be filed by it, and all such filed Tax Returns are complete and accurate in all material respects; (ii) has paid all Taxes that are required to have been paid by it; (iii) has not waived (or requested a waiver of) any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency; and (iv) does not have any deficiency, assessment, claim, audit, examination, investigation, litigation or other proceeding in respect of Taxes or Tax matters pending, asserted, proposed or threatened in writing.
(b) Future Health is not a party to, is bound by or has an obligation under any Tax sharing agreement, Tax indemnification agreement, Tax allocation agreement or similar contract or arrangement (including any agreement, contract or arrangement providing for the sharing or ceding of tax credits or losses) or has a liability or obligation to any person as a result of or pursuant to any such agreement, contract, or arrangement.
(c) Future Health has withheld and paid to the appropriate Tax authority all Taxes required to have been withheld and paid in connection with amounts paid or owing to any current or former employee, independent contractor, creditor, shareholder or other third party.
(d) Future Health has not been a member of an affiliated group filing a consolidated, combined or unitary U.S. federal, state, local or non-U.S. income Tax Return.
(e) Future Health does not have any liability for the Taxes of any other person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or non-U.S. law), as a transferee or successor, or by contract or otherwise.
(f) Future Health (i) does not have any request for a ruling in respect of Taxes pending between Future Health and any Tax Authority, and (ii) has not entered into any closing agreements, private letter rulings, technical advice memoranda or similar agreements with a Tax Authority.
(g) Future Health has not engaged in or entered into a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2).
(h) No Tax Authority or agency has asserted in writing or, to the knowledge of Future Health, has threatened to assert against Future Health, any deficiency or claim for any Taxes or interest thereon or penalties in connection therewith.
(i) There are no Tax liens upon any assets of Future Health except for liens for Taxes not yet due and payable.
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(j) No written claim, or, to the knowledge of Future Health, no oral claim has ever been made by a Tax Authority in a jurisdiction in which Future Health does not file Tax Returns that Future Health is or may be subject to taxation in such jurisdiction.
(k) Future Health is not currently the beneficiary of any extension of time within which to file any Tax Return.
(l) Future Health, after consultation with its tax advisors, is not aware of the existence of any fact, or any action Future Health has taken (or failed to take) or agreed to take, that would reasonably be expected to prevent or impede the Transactions from qualifying for the Intended Tax-Free Treatment. As of the Closing Date, Future Health has not taken (or failed to take) or agreed to take any action that would reasonably be expected to prevent or impede the Transactions from qualifying for the Intended Tax-Free Treatment.
Section 5.15 Listing. The issued and outstanding Future Health Units are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the Nasdaq Capital Market (“Nasdaq”) under the symbol “FHLTU”. The issued and outstanding shares of Future Health Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “FHLT”. The issued and outstanding Future Health Warrants (excluding 7,375,000 Future Health Warrants issued in private placements) are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “FHLTW”. As of the date of this Agreement, there is no Action pending or, to the knowledge of Future Health, threatened in writing against Future Health by Nasdaq or the SEC with respect to any intention by such entity to deregister the Future Health Units, the shares of Future Health Common Stock, or Future Health Warrants or terminate the listing of Future Health on Nasdaq. None of Future Health or any of its Affiliates has taken any action in an attempt to terminate the registration of the shares of Future Health Common Stock, or the Future Health Warrants under the Exchange Act.
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Section 5.16 Private Placements. Future Health has delivered to the Company true, correct and complete copies of each of (i) the Subscription Agreement entered into by Future Health with the investor named therein (the “PIPE Investor”), pursuant to which the PIPE Investors have committed to purchase shares of Future Health Common Stock at a purchase price of $11.00 per share in the Private Placement solely for purposes of consummating the transactions contemplated hereby in an aggregate amount equal to the PIPE Commitment (such arrangement, the “PIPE Investment”) and (ii) the Forward Purchase Agreement entered into by Future Health with the FPA Investor, pursuant to which, upon the terms and subject to the conditions set forth therein, among other things, the FPA Investor has agreed to purchase the Forward Purchase Shares by the Purchase Deadline; provided, however, that in no event shall the FPA Investor be required to purchase Forward Purchase Shares at a price in excess $11.00 per share and in the event the FPA Investor purchases less than $20,000,000 of Forward Purchase Shares by the Purchase Deadline, the FPA Investor shall purchase from Future Health at the Future Health’s request, Additional Shares immediately prior to the Transaction in an amount equal to price set forth in the Forward Purchase Agreement (such arrangement, the “FPA Investment”). The Subscription Agreement and the Forward Purchase Agreement are in full force and effect and have not been withdrawn or terminated, or otherwise amended or modified, in any respect, and no withdrawal, termination, amendment or modification is contemplated by Future Health. The Subscription Agreement and the Forward Purchase Agreement is a legal, valid and binding obligation of Future Health, enforceable against Future Health in accordance with its terms subject to the Remedies Exceptions and, to the knowledge of Future Health, is a legal, valid and binding obligation of the PIPE Investor or the FPA Investor, as applicable, enforceable against the PIPE Investor or the FPA Investor, as applicable, in accordance with its terms subject to the Remedies Exceptions. The Subscription Agreement provides that the Company is an express third party beneficiary thereof and is entitled to enforce such agreement against the PIPE Investor. There are no other agreements, side letters, or arrangements (x) between Future Health and the PIPE Investor relating to any Subscription Agreement or the Private Placement that could affect the obligation of the PIPE Investor to purchase the shares of Future Health Common Stock in the Private Placement equal to the commitment amount set forth in the Subscription Agreement of the PIPE Investor or (y) between Future Health and the FPA Investor relating to the Forward Purchase Agreement that could affect the obligation of the FPA Investor to purchase the number of Forward Purchase Shares in open market transactions or Additional Shares equal to the commitment amount set forth in the Forward Purchase Agreement. No event has occurred that, with or without notice, lapse of time or both, would constitute a default or breach on the part of Future Health under any material term or condition of the Subscription Agreement or the Forward Purchase Agreement and, as of the date hereof, Future Health has no reason to believe that it will be unable to satisfy in all material respects on a timely basis any term or condition of closing to be satisfied by it contained in the Subscription Agreement or the Forward Purchase Agreement. The Subscription Agreements and the Forward Purchase Agreement contain all of the conditions precedent (other than the conditions contained in the other Transaction Documents) to the obligations of the PIPE Investor or the FPA Investor, as applicable, to purchase the shares of Future Health Common Stock in the Private Placement or in open market transactions, as applicable, in commitment amount set forth in the Subscription Agreement or the Forward Purchase Agreement, as applicable, on the terms therein.
Section 5.17 Future Health’s Investigation and Reliance; Investment Intent.
(a) Future Health is a sophisticated purchaser and has made its own independent investigation, review and analysis regarding Seller, the Company and the Transactions, which investigation, review and analysis were conducted by Future Health together with expert advisors, including legal counsel that they have engaged for such purpose. Future Health and its Representatives have been provided with full and complete access to the Representatives, properties, offices, plants and other facilities, books and records of Seller and the Company and other information that they have requested in connection with their investigation of Seller, the Company and the Transactions. Future Health is not relying on any statement, representation or warranty, oral or written, express or implied, made by the Company or any of its Representatives, except as expressly set forth in Article IV (as modified by the Company Disclosure Schedule) or in any certificate delivered by the Company pursuant to this Agreement. Except as otherwise set forth in this Agreement, neither the Company, nor any of its Affiliates or Representatives shall have any liability to Future Health or any of its stockholders, Affiliates or Representatives resulting from the use of any information, documents or materials made available to Future Health or any of its Representatives, whether orally or in writing, in any confidential information memoranda, “data rooms,” management presentations, due diligence discussions or in any other form in expectation of the Transactions. Future Health acknowledges that neither the Company nor any of its Affiliates or Representatives is making, directly or indirectly, any representation or warranty with respect to any estimates, projections or forecasts involving the Company.
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(b) Future Health understands and acknowledges that its acquisition of the Purchased Shares involves substantial risk. Future Health can bear the economic risk of its investment (which Future Health acknowledges may be for an indefinite period) and has sufficient knowledge and experience in financial or business matters that Future Health is capable of evaluating the merits and risks of its investment in the Purchased Shares.
(c) Future Health is acquiring the Purchased Shares for its own account, for investment purposes only and not with a view toward, or for sale in connection with, any distribution thereof, or with any present intention of distributing or selling any Purchased Shares in violation of the federal securities laws, any applicable foreign securities law, Blue Sky Laws, or any other applicable Laws.
(d) Future Health understands and acknowledges that the Purchased Shares have not been registered under the Securities Act, any United States securities laws or any other applicable foreign law or Blue Sky Laws. Future Health acknowledges that the Purchased Shares may not be transferred, sold, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any other provision of applicable United States federal securities laws, Blue Sky Laws, or other Laws or pursuant to an applicable exemption therefrom. Future Health acknowledges that there is no public market for the Purchased Shares and that there can be no assurance that a public market will develop.
Article VI.
CONDUCT OF BUSINESS PENDING THE closing
Section 6.01 Conduct of Business by the Company Pending the Closing.
(a) Seller and the Company agree that during the Interim Period, except as (1) expressly contemplated by the Reorganization, any other provision of this Agreement or any Transaction Document, (2) set forth in Section 6.01 of the Company Disclosure Schedule, and (3) required by applicable Law (including as may be requested or compelled by any Governmental Authority), unless Future Health shall otherwise consent in writing (which consent shall not be unreasonably conditioned, withheld or delayed):
(i) the Company shall, and Seller shall cause the Company to, conduct its Business in the ordinary course of business and in a manner consistent with past practice, including, without limitation, with respect to payment of accounts payable and collection of accounts receivable; and
(ii) the Company shall, and Seller shall cause the Company to, use its reasonable best efforts to preserve substantially intact the business organization of the Company, to keep available the services of the current officers, key employees and consultants of the Company and to preserve the current relationships of the Company with customers, suppliers and other persons with which the Company has significant business relations.
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(b) By way of amplification and not limitation, except as (1) expressly contemplated by the Reorganization, any other provision of this Agreement or any Transaction Document, (2) as set forth in Section 6.01(b) of the Company Disclosure Schedule, (3) in connection with the Company Permitted Interim Financing and (4) as required by applicable Law (including as may be requested or compelled by any Governmental Authority), the Company shall not, and Seller shall cause the Company not to, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Future Health (which consent shall not be unreasonably conditioned, withheld or delayed):
(i) amend or otherwise change its Company Organizational Documents except in its sole discretion, Seller may convert the Company to a single member limited liability company in which case the membership interest(s) of the Company will be transferred pursuant to this Agreement, and this Agreement shall be deemed amended in any respect necessary or appropriate as a result thereof;
(ii) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (A) any shares of any class of capital stock of the Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company, provided that the consent of Future Health shall not be required with respect to: the issuance or sale of any class of capital stock of the Company, or any Company Interim Period Convertible Notes or securities into which the Company Interim Period Convertible Notes are convertible in a bona fide financing (collectively, the “Company Interim Securities”) in accordance with the limitations set forth in Section 6.01(b)(ii) of the Company Disclosure Schedule in an aggregate principal amount not to exceed $75,000,000 (a “Company Permitted Interim Financing”); or (B) any material assets of the Company;
(iii) except in connection with any REACH-related business, form any subsidiary or acquire any equity interest or other interest in any other entity or enter into a joint venture with any other entity;
(iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(v) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock, other than redemptions of equity securities from former employees and other service providers upon the terms set forth in the underlying agreements governing such equity securities;
(vi) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or any assets or any other business combination) any corporation, partnership, other business organization or any division thereof, other than the acquisition of inventory and up to $100,000 of fixed assets in the ordinary course of business consistent with past practice; or (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or intentionally grant any security interest in any of its assets; provided that any of the foregoing undertaken in connection with the Company Permitted Interim Financing shall not require the consent of Future Health;
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(vii) (A) grant any increase in the compensation, incentives or benefits payable or to become payable to any current or former director, officer, employee or consultant of the Company (or their respective beneficiaries or dependents) as of the date of this Agreement, (B) enter into any new, or amend in any material respect any existing employment or severance or termination agreement with any current or former director, officer, employee or consultant, or (C) accelerate or commit to accelerate the funding, payment, or vesting of any compensation or benefits to any current or former director, officer, employee or consultant (except that the Company may (1) increase base compensation of current directors, officers, employees or consultants as set forth on Section 6.01(b)(vii) of the Company Disclosure Schedule, (2) provide increases in salary, wages, bonuses or benefits to employees as required under any employment or consulting agreement in effect on the date of this Agreement and reflected on Section 4.11(a) of the Company Disclosure Schedule, (3) change the title of its employees in the ordinary course of business consistent with past practice, and (4) make annual or quarterly bonus or commission payments in the ordinary course of business and in accordance with the bonus or commission plans existing on the date of this Agreement and reflected on Section 4.11(a) of the Company Disclosure Letter);
(viii) other than as required by Law or pursuant to the terms of an agreement entered into prior to the date of this Agreement and reflected on Section 4.11(a) of the Company Disclosure Schedule or that the Company is not prohibited from entering into after the date hereof, grant any severance or termination pay to, any director or officer of the Company;
(ix) adopt, amend and/or terminate any material Plan except as may be required by applicable Law, is necessary in order to consummate the Transactions, or health and welfare plan renewals in the ordinary course of business;
(x) materially amend other than reasonable and usual amendments in the ordinary course of business, with respect to accounting policies or procedures, other than as required by GAAP;
(xi) (A) amend any material Tax Return, (B) change any material method of Tax accounting, (C) make, change or rescind any material election relating to Taxes, or (D) settle or compromise any material U.S. federal, state, local or non-U.S. Tax audit, assessment, Tax claim or other controversy relating to Taxes, (E) enter into any agreement with any Tax Authority (including a “closing agreement” under Code Section 7121) with respect to any Tax or Tax Returns, or (F) waive any statute of limitation in respect of Taxes;
(xii) materially amend, or modify or consent to the termination (excluding any expiration in accordance with its terms) of any Material Contract or amend, waive, modify or consent to the termination (excluding any expiration in accordance with its terms) of the Company’s material rights thereunder, in each case in a manner that is adverse to the Company, except in the ordinary course of business;
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(xiii) enter into any contract, agreement or arrangement that obligates the Company to develop any Intellectual Property related to the Business, other than where the results of the Company’s performance would be Company-Owned IP;
(xiv) intentionally permit any material item of Company-Owned IP to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in each and every material item of Company-Owned IP; or
(xv) transfer, sublet, modify, terminate or otherwise amend any Lease or fail to satisfy the Company’s obligations under any Lease or other Material Contract, other than reasonable and usual amendments or modifications in the ordinary course of business;
(xvi) enter into any formal or informal agreement or otherwise make a binding commitment to do any of the foregoing.
Nothing herein shall require the Company to obtain consent from Future Health to do any of the foregoing if obtaining such consent might reasonably be expected to violate applicable Law, and nothing contained in this Section 6.01 shall give to Future Health, directly or indirectly, the right to control or direct the operations of the Company prior to the Closing Date. Prior to the Closing Date, each of Future Health and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its respective operations, as required by Law.
(c) The Company shall have until June 20, 2022 to deliver the Company Disclosure Schedule to Future Health. Notwithstanding that the Company Disclosure Schedule may be delivered subsequent to the date of this Agreement, Future Health acknowledges and agrees that the Company Disclosure Schedule shall have the effect of qualifying the representations and warranties and other matters, as applicable pursuant to this Agreement, as of the date of this Agreement. Following initial delivery of the Company Disclosure Schedule, from time to time prior to the Closing, Seller shall have the right (but not the obligation) to supplement or amend the Company Disclosure Schedule hereto with respect to any matter thereafter arising or of which Seller becomes aware after the date of delivery of the initial Company Disclosure Schedule (each a “Schedule Supplement”).
Section 6.02 Conduct of Business by Future Health Pending the Closing. Except as expressly contemplated by any other provision of this Agreement or any Transaction Document (including entering into the Subscription Agreement and consummating the Private Placements), except as set forth on Section 6.02 of the disclosure schedule delivered by the Future Health in connection with this Agreement and as required by applicable Law (including as may be requested or compelled by any Governmental Authority), Future Health agrees that during the Interim Period, unless the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), the business of Future Health shall be conducted in the ordinary course of business and in a manner consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by any other provision of this Agreement or any Transaction Document (including entering into the Subscription Agreement and consummating the Private Placements), or in connection with the terms and conditions of, any Subscription Agreement, as set forth on Section 6.02 of the Company Disclosure Schedule or and as required by applicable Law (including as may be requested or compelled by any Governmental Authority), Future Health shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company, which consent shall not be unreasonably withheld, delayed or conditioned:
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(a) amend or otherwise change the Future Health Organizational Documents or form any subsidiary of Future Health;
(b) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, other than redemptions from the Trust Fund that are required pursuant to the Future Health Organizational Documents;
(c) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Future Health Common Stock or Future Health Warrants except for redemptions from the Trust Fund;
(d) other than in connection with the Private Placements, issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of any class of capital stock or other securities of Future Health, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of Future Health, and in connection with a loan from certain of Future Health’s officers and directors to finance Future Health’s transaction costs in connection with the transactions contemplated hereby;
(e) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or enter into any strategic joint ventures, partnerships or alliances with any other person;
(f) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person or persons, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Future Health, as applicable, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing, in each case, except in the ordinary course of business consistent with past practice or except a loan from certain of Future Health’s officers and directors to finance Future Health’s transaction costs in connection with the transactions contemplated hereby;
(g) make any change in any method of financial accounting or financial accounting principles, policies, procedures or practices, except as required by a concurrent amendment in GAAP or applicable Law made subsequent to the date hereof, as agreed to by its independent accountants;
(h) (A) amend any material Tax Return, (B) change any material method of Tax accounting, (C) make, change or rescind any material election relating to Taxes, or (D) settle or compromise any material U.S. federal, state, local or non-U.S. Tax audit, assessment, Tax claim or other controversy relating to Taxes;
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(i) liquidate, dissolve, reorganize or otherwise wind up the business and operations of Future Health;
(j) amend the Trust Agreement or any other agreement related to the Trust Account; or
(k) enter into any formal or informal agreement or otherwise make a binding commitment to do any of the foregoing.
Nothing herein shall require Future Health to obtain consent from the Company to do any of the foregoing if obtaining such consent might reasonably be expected to violate applicable Law, and nothing contained in this Section 6.02 shall give to the Company, directly or indirectly, the right to control or direct the operations of Future Health prior to the Closing Date. Prior to the Closing Date, each of Future Health and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its respective operations, as required by Law.
Section 6.03 Claims Against Trust Account. Seller and the Company agree that, notwithstanding any other provision contained in this Agreement, neither Seller nor the Company now has, and neither Seller nor the Company shall at any time prior to the Closing have, any claim to, or make any claim against, the Trust Fund, regardless of whether such claim arises as a result of, in connection with or relating in any way to, the business relationship between Seller or the Company, on the one hand, and Future Health on the other hand, this Agreement, or any other agreement or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (any and all such claims are collectively referred to in this Section 6.03 as the “Claims”). Notwithstanding any other provision contained in this Agreement, Seller and the Company hereby irrevocably waive any Claim they may have, now or in the future and will not seek recourse against the Trust Fund for any reason whatsoever in respect thereof; provided, however, that the foregoing waiver will not limit or prohibit Seller or the Company from pursuing a claim against Future Health or any other person (a) for legal relief against monies or other assets of Future Health held outside of the Trust Account or for specific performance or other equitable relief in connection with the Transactions or (b) for damages for breach of this Agreement against Future Health (or any successor entity) in the event this Agreement is terminated for any reason and Future Health consummates a business combination transaction with another party. In the event that Seller or the Company commences any action or proceeding against or involving the Trust Fund in violation of the foregoing, Future Health shall be entitled to recover from either Seller or the Company the associated reasonable legal fees and costs in connection with any such action, in the event Future Health prevails in such action or proceeding.
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Article VII.
ADDITIONAL AGREEMENTS
Section 7.01 Proxy Statement.
(a) As promptly as practicable after the execution of this Agreement and Future Health’s receipt of the Audited Financial Statements and Reviewed Financial Statements, subject to the terms of this Section 7.01, Future Health (with the assistance and cooperation of Seller as reasonably requested by Future Health) shall prepare and file with the SEC a proxy statement (as amended or supplemented, the “Proxy Statement”) to be sent to the stockholders of Future Health relating to the meeting of Future Health’s stockholders (including any adjournment or postponement thereof, the “Future Health Stockholders’ Meeting”) to be held to consider (i) approval and adoption of this Agreement and the Transactions, (ii) approval of the issuance of Future Health Common Stock as contemplated by this Agreement, the Subscription Agreement and the Forward Purchase Agreement, (ii) the second amended and restated Future Health Certificate of Incorporation and (iii) any other proposals the parties deem necessary to effectuate the Transactions (collectively, the “Future Health Proposals”). If determined by the parties appropriate, Future Health may prepare and file with the SEC a registration statement on Form S-4 (together with all amendments thereto, the “Registration Statement”) in which the Proxy Statement shall be included as a prospectus, in connection with the registration under the Securities Act of the shares of Future Health Common Stock to be issued to Seller pursuant to this Agreement. Future Health on the one hand, and Seller on the other hand, shall each pay one half of all registration and filing fees due in connection with the Registration Statement, if applicable. Seller shall furnish all information concerning Seller or the Company as Future Health may reasonably request in connection with such actions and the preparation of the Proxy Statement and Registration Statement, if applicable. Future Health and Seller each shall use their reasonable best efforts to (i) cause the Registration Statement or the Proxy Statement when filed with the SEC to comply in all material respects with all legal requirements applicable thereto, (ii) respond as promptly as reasonably practicable to and resolve all comments received from the SEC concerning the Registration Statement or the Proxy Statement, (iii) if applicable, cause the Registration Statement to be declared effective under the Securities Act as promptly as practicable and (iv) if applicable, keep the Registration Statement effective as long as is necessary to consummate the Transactions. Prior to the effective date of the Registration Statement or the filing of the definitive Proxy Statement, Future Health shall use commercially reasonable efforts to take any action required under any applicable federal or state securities laws in connection with the issuance of shares of Future Health Common Stock, in each case to be issued or issuable to Seller pursuant to this Agreement. As promptly as practicable after finalization of the Proxy Statement, Future Health shall mail the Proxy Statement to its stockholders. As promptly as practicable following the clearance of the Proxy Statement by the SEC, Future Health shall mail the Proxy Statement to its stockholders.
(b) No filing of, or amendment or supplement to the Proxy Statement or the Registration Statement will be made by Future Health, Seller or the Company without the approval of the other party (such approval not to be unreasonably withheld, conditioned or delayed). Future Health and Seller each will advise the other, promptly after they receive notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has been filed, of the issuance of any stop order, of the suspension of the qualification of the Future Health Common Stock to be issued or issuable to Seller in connection with this Agreement for offering or sale in any jurisdiction, or of any request by the SEC for amendment of the Proxy Statement or the Registration Statement or comments thereon and responses thereto or requests by the SEC for additional information. Each of Future Health and Seller shall cooperate and mutually agree upon (such agreement not to be unreasonably withheld or delayed), any response to comments of the SEC or its staff with respect to the Registration Statement or the Proxy Statement and any amendment to the Registration Statement or the Proxy Statement filed in response thereto.
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(c) Future Health represents that the information supplied by Future Health for inclusion in the Registration Statement and the Proxy Statement shall not, at (i) the time the Registration Statement is declared effective, if applicable, (ii) the time the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to the stockholders of Future Health, (iii) the time of the Future Health Stockholders’ Meeting, and (iv) the Closing, contain any untrue statement of a material fact or fail to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If, at any time prior to the Closing, any event or circumstance relating to Future Health, or its officers or directors, should be discovered by Future Health which should be set forth in an amendment or a supplement to the Registration Statement or the Proxy Statement, Future Health shall promptly inform Seller. All documents that Future Health is responsible for filing with the SEC in connection with the Transactions or the other transactions contemplated by this Agreement will comply as to form and substance in all material respects with the applicable requirements of the Securities Act and the rules and regulations thereunder and the Exchange Act and the rules and regulations thereunder.
(d) Seller represents that the information supplied by it for inclusion in the Registration Statement and the Proxy Statement shall not, at (i) the time the Registration Statement is declared effective, if applicable, (ii) the time the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to the stockholders of Future Health, (iii) the time of Future Health Stockholders’ Meeting, and (iv) the Closing, contain any untrue statement of a material fact or fail to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If, at any time prior to the Closing, any event or circumstance relating to Seller or the Company, or their respective officers or directors, should be discovered by Seller which should be set forth in an amendment or a supplement to the Registration Statement or the Proxy Statement, Seller shall promptly inform Future Health. All documents that Seller or the Company is responsible for filing with the SEC in connection with the Transactions or the other transactions contemplated by this Agreement will comply as to form and substance in all material respects with the applicable requirements of the Securities Act and the rules and regulations thereunder and the Exchange Act and the rules and regulations thereunder.
Section 7.02 Future Health Stockholders’ Meeting
(a) Future Health shall call and hold the Future Health Stockholders’ Meeting as promptly as practicable following the clearance of the Proxy Statement by the SEC for the purpose of voting solely upon the Future Health Proposals, and Future Health shall use its reasonable best efforts to hold the Future Health Stockholders’ Meeting as soon as practicable following the clearance of the Proxy Statement by the SEC; provided that Future Health may postpone or adjourn the Future Health Stockholders’ Meeting on one or more occasions for up to 30 days in the aggregate upon the good faith determination by the Future Health Board that such postponement or adjournment is necessary to solicit additional proxies to obtain approval of the Future Health Proposals or otherwise take actions consistent with Future Health’s obligations pursuant to this Agreement. Future Health shall use its reasonable best efforts to obtain the approval of the Future Health Proposals at the Future Health Stockholders’ Meeting, including by soliciting from its stockholders proxies as promptly as possible in favor of the Future Health Proposals, and shall take all other action necessary or advisable to secure the required vote or consent of its stockholders. The Future Health Board shall recommend to its stockholders that they approve the Future Health Proposals and shall include such recommendation in the Proxy Statement.
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Section 7.03 Access to Information; Confidentiality.
(a) During the Interim Period, Seller, the Company and Future Health shall (and shall cause their respective subsidiaries to): (i) provide to the other party (and the other party’s officers, directors, employees, accountants, consultants, legal counsel, agents and other representatives, collectively, “Representatives”) reasonable access at reasonable times upon prior notice to the officers, employees, agents, properties, offices and other facilities of such party and its subsidiaries and to the books and records thereof; and (ii) furnish promptly to the other party such information concerning the business, properties, contracts, assets, liabilities, personnel, Taxes and other aspects of such party and its subsidiaries as the other party or its Representatives may reasonably request, including in connection with any Tax disclosure in any statement, filing, notice or application relating to the Intended Tax-Free Treatment or any Tax opinion requested or required to be filed pursuant to Section 7.14(b). Notwithstanding the foregoing, none of the Company, Seller or Future Health shall be required to provide access to or disclose information where, in the Seller’s reasonable determination, (i) the access or disclosure would jeopardize the protection of attorney-client privilege, (ii) contravene any applicable Law, fiduciary duty or binding agreement entered into prior to the date of this Agreement or (iii) such access or disclosure would cause significant competitive harm to the Company or the Business if the Transactions contemplated by this Agreement are not consummated (it being agreed that, in the case of each of the foregoing, the parties shall use their commercially reasonable efforts to cause such information to be provided in a manner that would not result in such jeopardy, contravention or harm). Prior to the Closing, without the prior written consent of the Seller, neither Future Health, nor any of its Representatives shall contact any payors, customers, suppliers, employees or agents of the Company or Seller.
(b) All information obtained by the parties pursuant to this Section 7.03 shall be kept confidential in accordance with the Mutual Nondisclosure Agreement, dated November 9, 2021 (the “Confidentiality Agreement”), between Future Health and Seller.
(c) Notwithstanding anything in this Agreement to the contrary, each party (and its respective Representatives) may consult any tax advisor as is reasonably necessary regarding the tax treatment and tax structure of the Transactions and may disclose to such advisor as if reasonably necessary, the tax treatment and tax structure of the Transactions and all materials (including any tax analysis) that are provided relating to such treatment or structure, in each case in accordance with the Confidentiality Agreement.
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Section 7.04 Exclusivity.
(a) During the Interim Period, Seller and the Company shall not take, nor shall either permit any of its controlled Affiliates or Representatives to take, whether directly or indirectly, any action to solicit, initiate, continue or engage in discussions or negotiations with, or enter into any agreement with, or encourage, respond, provide information to or commence due diligence with respect to, any person (other than Future Health, its stockholders and/or any of their Affiliates or Representatives), concerning, relating to or which is intended or is reasonably likely to give rise to or result in, any offer, inquiry, proposal or indication of interest, written or oral relating to any merger, sale of ownership interests and/or assets (other than asset sales in the ordinary course of business) of the Company, recapitalization or similar transaction, in each case other than (i) the Transactions, (ii) any purchase of shares of Future Health Common Stock in any Private Placement, (iii) any Company Permitted Interim Financing, or (iv) any other issue of shares of capital stock of the Company or indebtedness or other securities convertible into or exercisable for capital stock of the Company (other than with Future Health, its stockholders and their respective Affiliates and Representatives, the PIPE Investor with respect to the Private Placement or the FPA Investor with respect to the FPA Investment) permitted without the consent of Future Health in accordance with Section 6.01(b). For the avoidance of doubt, the foregoing shall not restrict the Company from soliciting, structuring, entering into or consummating any Company Permitted Interim Financing.
(b) During the Interim Period, Future Health shall not, nor shall Future Health permit any of its controlled Affiliates or Representatives to, solicit, initiate, continue or engage in discussions or negotiations with, or enter into any agreement with, or encourage, respond, provide information to or commence due diligence with respect to, any person (other than Seller, the Company, their shareholders and/or any of their Affiliates or Representatives), concerning any merger, purchase of ownership interests or assets of Future Health, recapitalization or similar business combination transaction or any other “Business Combination” (as defined in the Future Health Organizational Documents), in each case, other than the Transactions (a “Future Health Business Combination Proposal”). In addition, Future Health shall, and shall cause its controlled Affiliates to, and shall cause their respective Representatives to, immediately cease any and all existing discussions or negotiations with any person with respect to any Future Health Business Combination Proposal.
Section 7.05 Employee Benefits Matters.
(a) Future Health shall, or shall cause its Affiliates, as applicable, to provide the employees of the Company who remain employed immediately after the Closing (the “Continuing Employees”) credit for purposes of eligibility to participate, vesting and determining the level of benefits, as applicable, under any employee benefit plan, program or arrangement established or maintained for the Continuing Employees (excluding any retiree health plans or programs, or defined benefit retirement plans or programs) to the same extent recognized by the Company immediately prior to the Closing; provided, however, that such crediting of service shall not operate to duplicate any benefit or the funding of any such benefit. Following the Closing, the Company will honor all accrued but unused vacation and other paid time off of the Continuing Employees that existed immediately prior to the Closing with respect to the calendar year in which the Closing occurs.
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(b) The provisions of this Section 7.05 are solely for the benefit of the parties to the Agreement, and nothing contained in this Agreement, express or implied, shall confer upon any Continuing Employee or legal representative or beneficiary or dependent thereof, or any other person, any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement, whether as a third-party beneficiary or otherwise, including, without limitation, any right to employment or continued employment for any specified period, or level of compensation or benefits. Nothing contained in this Agreement, express or implied, shall constitute an amendment or modification of any employee benefit plan of the Company or shall require the Company, Future Health, the Company and each of its subsidiaries to continue any Plan or other employee benefit arrangements, or prevent their amendment, modification or termination.
Section 7.06 Adoption of Equity Plan and Stock Purchase Program. Prior to the effectiveness of the Registration Statement or the filing of the definitive Proxy Statement, the Future Health Board will adopt, subject to approval by the stockholders of Future Health at the Future Health Stockholders’ Meeting, a customary equity incentive plan and a customary employee stock purchase program that are reasonably acceptable to Seller.
Section 7.07 Directors’ and Officers’ Indemnification.
(a) The provisions of the articles of incorporation and bylaws of the Company and the certificate of incorporation and bylaws Future Health with respect to indemnification, advancement or expense reimbursement shall not be amended, repealed or otherwise modified for a period of six (6) years from the Closing in any manner that would affect adversely the rights thereunder of individuals who, at or prior to the Closing, were directors, officers, employees, fiduciaries or agents of the Company or Future Health, unless such modification shall be required by applicable Law. From and after the Closing, Future Health agrees that it shall indemnify and hold harmless each present and former director and officer of the Company or Future Health against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the Closing, whether asserted or claimed prior to, at or after the Closing, to the fullest extent that the Company or Future Health, as applicable, would have been permitted under applicable Law, the Company Organizational Documents or Future Health Organizational Documents, as applicable, or any director indemnification agreement or employment agreement, in effect on the date of this Agreement to indemnify such person (including the advancing of expenses as incurred to the fullest extent permitted under applicable Law). Future Health further agrees that with respect to the provisions of the Company Organizational Documents relating to indemnification, advancement or expense reimbursement, such provisions shall not be amended, repealed or otherwise modified for a period of six (6) years from the Closing Date in any manner that would affect adversely the rights thereunder of individuals who, at or prior to the Closing Date, were directors, officers, employees, fiduciaries or agents of the Company unless such modification shall be required by applicable Law.
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(b) Prior to the Closing, Future Health shall purchase and obtain as of the Closing Date “tail” insurance policies extending coverage for an aggregate period of six (6) years providing directors’ and officers’ liability insurance with respect to claims arising from facts or events that occurred on or before the Closing covering (as direct beneficiaries) those persons who are currently covered by the Company’s and Future Health’s directors’ and officers’ liability insurance policies, in each case of the type and with the amount of coverage no less favorable than those of the directors’ and officers’ liability insurance maintained as of the date hereof by, or for the benefit of, the Company and Future Health, as applicable.
(c) The Company shall obtain directors’ and officers’ liability insurance and Side A coverage, which shall include the acts or omissions of Future Health’s officers and directors prior to the Closing (including with respect to the Transactions), in an amount of at least $30,000,000 of coverage to be bound at the Closing (the “D&O Policy”).
(d) On the Closing Date, Future Health shall enter into customary indemnification agreements reasonably satisfactory to each of the Company and Future Health with the post-Closing directors and officers of Future Health, which indemnification agreements shall continue to be effective following the Closing.
Section 7.08 Notification of Certain Matters. During the Interim Period, Seller shall give prompt notice to Future Health, and Future Health shall give prompt notice to Seller, of any event which a party becomes aware of between the date of this Agreement and the Closing (or the earlier termination of this Agreement in accordance with Article IX), the occurrence, or non-occurrence of which causes or would reasonably be expected to cause any of the conditions set forth in Article VIII to fail.
Section 7.09 Further Action; Reasonable Best Efforts.
(a) Upon the terms and subject to the conditions of this Agreement, during the Interim Period, each of the parties hereto shall use its reasonable best efforts to take, or cause to be taken, appropriate action, and to do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise, and each shall cooperate with the other, to consummate and make effective the Transactions, including, without limitation, using its reasonable best efforts to obtain all permits, consents, approvals, authorizations, qualifications and orders of, and the expiration or termination of waiting periods by, Governmental Authorities and parties to contracts with the Company as set forth in Section 4.05 necessary for the consummation of the Transactions and to fulfill the conditions to the Transactions. In case, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each party shall use their reasonable best efforts to take all such action.
(b) During the Interim Period, each of the parties shall keep each other apprised of the status of matters relating to the Transactions, including promptly notifying the other parties of any communication it or any of its Affiliates receives from any Governmental Authority relating to the matters that are the subject of this Agreement and permitting the other parties to review in advance, and to the extent practicable consult about, any proposed communication by such party to any Governmental Authority in connection with the Transactions. No party to this Agreement shall agree to participate in any meeting, or video or telephone conference, with any Governmental Authority in respect of any filings, investigation or other inquiry unless it consults with the other parties in advance and, to the extent permitted by such Governmental Authority, gives the other parties the opportunity to attend and participate at such meeting or conference. Subject to the terms of the Confidentiality Agreement, the parties will coordinate and cooperate fully with each other in exchanging such information and providing such assistance as the other parties may reasonably request in connection with the foregoing. Subject to the terms of the Confidentiality Agreement, the parties will provide each other with copies of all material correspondence, filings or communications, including any documents, information and data contained therewith, between them or any of their Representatives, on the one hand, and any Governmental Authority, on the other hand, with respect to this Agreement and the Transactions contemplated hereby. No party shall take or cause to be taken any action before any Governmental Authority that is inconsistent with or intended to delay its action on requests for a consent or the consummation of the Transactions.
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(c) Notwithstanding the generality of the foregoing, Future Health shall use its reasonable best efforts to consummate (i) the Private Placement in accordance with the Subscription Agreement, in an aggregate amount equal to the PIPE Commitment and (ii) the FPA Investment in accordance with the Forward Purchase Agreement, in an aggregate amount equal to the FPA Commitment, and Seller and the Company shall cooperate with Future Health in such efforts. Future Health shall not, without the prior written consent Seller (such consent not to be unreasonably withheld, delayed or conditioned), permit or consent to any amendment, supplement or modification to the Subscription Agreement that would reasonably be expected to cause the condition set forth in Section 8.01(f) to fail.
Section 7.10 Public Announcements. The initial press release relating to this Agreement shall be a joint press release the text of which has been agreed to by each of Future Health and Seller. Thereafter, between the date of this Agreement and the Closing Date (or the earlier termination of this Agreement in accordance with Article IX) unless otherwise prohibited by applicable Law or the requirements of Nasdaq, each of Future Health and Seller shall each use its reasonable best efforts to consult with each other before issuing any press release or otherwise making any public statements (including through social media platforms) with respect to this Agreement or the Transactions, and shall not issue any such press release or make any such public statement (including through social media platforms) without the prior written consent of the other party. Furthermore, nothing contained in this Section 7.10 shall prevent Future Health or Seller and/or its respective Affiliates from furnishing customary or other reasonable information concerning the Transactions to their investors and prospective investors that is substantively consistent with public statements previously consented to by the other party in accordance with this Section 7.10. Neither party shall provide statements or give interviews of any description without the prior consent of the other party.
Section 7.11 Stock Exchange Listing. Future Health will use its reasonable best efforts to cause the Closing Stock Consideration and any Earnout Shares issued in connection with the Transactions to be approved for listing on Nasdaq at Closing. Future Health and Seller shall each pay one half of all filing fees and out-of-pocket expenses due in connection with any such listing of the Closing Stock Consideration issued in connection with the Transactions (excluding, for the avoidance of doubt, expenses of such party’s legal counsel). During the Interim Period, Future Health shall use its reasonable best efforts to keep the Future Health Common Stock and Future Health Warrants listed for trading on Nasdaq. For the avoidance of doubt, Future Health shall pay all filing fees and out-of-pocket expenses due in connection with any such listing of the Earnout Shares issued in connection with the Transactions.
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Section 7.12 Antitrust.
(a) To the extent required under any Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade, including the HSR Act (“Antitrust Laws”), each party hereto agrees to promptly make any required filing or application under Antitrust Laws, as applicable, and no later than ten (10) Business Days after the date of this Agreement, Seller and Future Health each shall file with the Antitrust Division of the U.S. Department of Justice and the U.S. Federal Trade Commission a Notification and Report From as required by the HSR Act. Future Health and Seller shall each pay one half of all administrative filing fees and out-of-pocket expenses due in connection with any such required filing (excluding, for the avoidance of doubt, expenses of such party’s legal counsel). The parties hereto agree to supply as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to Antitrust Laws and to take all other actions necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods or obtain required approvals, as applicable under Antitrust Laws as soon as practicable, including by requesting early termination of the waiting period provided for under the HSR Act.
(b) Future Health and Seller each shall, in connection with its efforts to obtain all requisite approvals and expiration or termination of waiting periods for the Transactions under any Antitrust Law, use its reasonable best efforts to: (i) cooperate in all respects with each other party or its Affiliates in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private person; (ii) keep the other reasonably informed of any communication received by such party from, or given by such party to, any Governmental Authority and of any communication received or given in connection with any proceeding by a private person, in each case regarding any of the Transactions, and promptly furnish the other with copies of all such written communications; (iii) permit the other to review in advance, when appropriate, any written communication to be given by it to, and consult with each other in advance of any meeting or video or telephonic conference with, any Governmental Authority or, in connection with any proceeding by a private person, with any other person, and to the extent permitted by such Governmental Authority or other person, give the other the opportunity to attend and participate in such in person, video or telephonic meetings and conferences; (iv) in the event a party is prohibited from participating in or attending any in person, video or telephonic meetings or conferences, the other shall keep such party promptly and reasonably apprised with respect thereto; and (v) use reasonable best efforts to cooperate in the filing of any memoranda, white papers, filings, correspondence or other written communications explaining or defending the Transactions, articulating any regulatory or competitive argument, and/or responding to requests or objections made by any Governmental Authority; provided that materials required to be provided pursuant to this Section 7.12(b) may be restricted to outside counsel, may be subject to a joint defense agreement and may be redacted (i) to remove references concerning the valuation of the Company, and (ii) as necessary to comply with contractual arrangements or protect other sensitive business information.
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(c) No party hereto shall take any action that could reasonably be expected to adversely affect or materially delay the approval of any Governmental Authority, or the expiration or termination of any waiting period under Antitrust Laws, including by agreeing to merge with or acquire any other person or acquire a substantial portion of the assets of or equity in any other person. The parties hereto further covenant and agree, with respect to a threatened or pending preliminary or permanent injunction or other order, decree or ruling or statute, rule, regulation or executive order that would adversely affect the ability of the parties to consummate the Transactions, to use reasonable best efforts to prevent or lift the entry, enactment or promulgation thereof, as the case may be.
Section 7.13 Trust Account. As of the Closing, the obligations of Future Health to dissolve or liquidate within a specified time period as contained in Future Health’s Certificate of Incorporation will be terminated and Future Health shall have no obligation whatsoever to dissolve and liquidate the assets of Future Health by reason of the consummation of the Transactions or otherwise, and no stockholder of Future Health shall be entitled to receive any amount from the Trust Account. At least 48 hours prior to the Closing, Future Health shall provide notice to the Trustee in accordance with the Trust Agreement and shall deliver any other documents, opinions or notices required to be delivered to the Trustee pursuant to the Trust Agreement and cause the Trustee prior to the Closing to, and the Trustee shall thereupon be obligated to, transfer all funds held in the Trust Account to Future Health (to be held as available cash on the balance sheet of Future Health, and to be used for working capital and other general corporate purposes of the business following the Closing) and thereafter shall cause the Trust Account and the Trust Agreement to terminate.
Section 7.14 Tax Matters.
(a) After the Closing, each of Future Health, Seller, the Company and their respective Affiliates and Representatives shall (A) file all Tax Returns consistent with the Intended Tax-Free Treatment (including attaching the statement described in Treasury Regulations Section 1.368-3(a) on or with the U.S. federal income Tax Returns of the Company and Future Health for the taxable year that includes the Closing), and (B) except to the extent otherwise required by a “determination” as such term is used in Section 1313 of the Code, take no position or action inconsistent with the Intended Tax-Free Treatment (whether in audits, Tax Returns or otherwise).
(b) Each of Future Health, Seller and the Company and their respective Affiliates and Representatives shall cooperate and use its respective reasonable best efforts to cause the Transactions to qualify for the Intended Tax-Free Treatment, and not to take any action or fail to take any action, in either case, that could reasonably be expected to prevent or impede the Transactions from qualifying for the Intended Tax-Free Treatment. Such cooperation and reasonable best efforts shall include (but not be limited to): (i) taking actions (and not failing to take actions) to cause the Transactions to qualify for the Intended Tax-Free Treatment, and not taking actions (or failing to take actions) that could reasonably be expected to prevent or impede the Transactions from qualifying for the Intended Tax-Free Treatment; (ii) a party promptly notifying the other party that such party knows or has reason to believe that the Transactions may not qualify for the Intended Tax-Free Treatment; and (iii) in the event Future Health, Seller or the Company seeks a tax opinion from its respective tax advisor regarding the Intended Tax-Free Treatment, or the SEC requests or requires tax opinions, each party shall execute and deliver customary tax representation letters to the applicable tax advisor in form and substance reasonably satisfactory to such advisor. Notwithstanding anything in this Agreement to the contrary, no party shall be required to undertake any of the following in order to cause the Transactions to qualify for the Intended Tax-Free Treatment: (x) modify the Stock Consideration (except to the extent noted in Section 7.14(c)); or (y) surrender, undermine or alter any of its other economic or legal rights pursuant to this Agreement to an extent that materially and adversely affects the benefits intended to be conferred upon Future Health and its shareholders, initial stockholders, or any Affiliates thereof (as contemplated by this Agreement prior to giving effect to any surrendering, undermining or alteration of such rights).
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(c) For U.S. federal income Tax purposes, each of Future Health, the Company and their respective Affiliates intend that this Agreement, including any amendments thereto, be, and is hereby adopted as, the “plan of reorganization” involving the Transactions within the meaning of Section 368 of the Code and Treasury Regulations Sections 1.368-2(g) and 1.368-3(a) (“Plan of Reorganization”). In recognition of the Intended Tax-Free Treatment, the Seller reserves the option at any time to convert the Company from a corporation to a single member limited liability company (“LLC”) that is treated as a disregard entity for tax purposes as of the date of such conversion and on the Closing Date (or merge the Company into a single member LLC owned by the Seller) and no election shall be made by any Party to change the tax treatment of that LLC to a corporation for tax purposes. The parties to this Agreement recognize that since Future Health is not assuming any Seller liability, then the consideration paid to Seller may be adjusted to provide for payment of cash to Seller in an amount adequate for Seller to pay off its liabilities, which cash payment is not intended to adversely affect the status the Intended Tax-Free Treatment. The parties further acknowledge and agree that the payment of the Earnout Shares will be structured so as to be in compliance with all the requirements applicable to contingent stock set forth in Rev. Proc. 84-42.
(d) For the avoidance of doubt, and notwithstanding anything to the contrary, each party acknowledges that it (and its respective Representatives and owners): (i) has had a reasonable opportunity to consult with tax advisors of its own choosing regarding this Agreement, the Transactions, and the tax structure of the Transactions, in each case, in accordance with the Confidentiality Agreement; (ii) is aware of the Tax consequences of the Transactions; (iii) is relying solely upon its own Representatives and is not relying upon any other party or its Representatives for tax advice regarding the Transactions; and (iv) other than representations and warranties explicitly provided pursuant to this Agreement, is not relying upon any representation or warranty from any party in determining the Tax treatment of the Transactions.
(e) Each of Future Health, the Company and their respective Affiliates and Representatives shall, at the Company’s sole cost and expense, cooperate fully, as and to the extent reasonably requested by any of the others, in connection with the filing of Tax Returns and any Action with respect to Taxes. Such cooperation shall include the retention and (upon request therefor) the provision of records and information reasonably relevant to any such Action and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Company and its Affiliates and Representatives shall retain all books and records with respect to Tax matters pertinent to the Company relating to any Taxable period beginning before the Closing Date until expiration of the statute of limitations of the respective Taxable periods, and to abide by all record retention agreements entered into with any Tax Authority.
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(f) All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement shall be borne by 100% by Future Health, and the parties to this Agreement will cooperate in filing all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration and other Taxes and fees.
(g) For the avoidance of doubt, the parties acknowledge and agree that (i) the Future Health Common Stock payable pursuant to this Agreement in exchange for substantially all of the assets of Seller is valuable, fair, and adequate consideration for such assets, (ii) it is contemplated that Seller and/or the shareholders of Seller will retain any and all Tax liabilities of Seller whether arising as a result of the transactions contemplated by this Agreement or otherwise, and (iii) Future Health is not assuming any Tax liabilities of Seller whether arising as a result of the transactions contemplated by this Agreement or otherwise.
(h) Each of Future Health and Continental (and Seller, if applicable) will be entitled to deduct and withhold from the amounts otherwise payable to any Person pursuant to this Agreement such amounts as are required to be deducted and withheld with respect to the making of such payment under any provision of any applicable Law. To the extent that amounts are so withheld and paid to the appropriate Tax Authority, such withheld amounts will be treated for all purposes of this Agreement as having been delivered and paid to the recipient of the payment in respect of which such deduction and withholding was made. Notwithstanding anything to the contrary herein, any compensatory amounts subject to payroll reporting and withholding that are payable pursuant to or as contemplated by this Agreement shall be payable in accordance with the applicable payroll procedures of the Company.
Section 7.15 Directors. Future Health shall take all necessary action so that immediately after the Closing, the board of directors of Future Health is comprised of the individuals mutually acceptable to Future Health, Seller and the Company.
Section 7.16 Audited Financial Statements. On or prior to July 15, 2022, Seller shall have delivered to Future Health as of the date hereof true and complete copies of the audited balance sheets of Company as of each fiscal year from inception through December 31, 2021, each audited in accordance with the auditing standards of the PCAOB for public companies as required by the SEC in connection with the filing of the Registration Statement or the Proxy Statement (collectively, the “Audited Financial Statements”). On or prior to July 15, 2022, Seller shall deliver to Future Health true and complete copies of the reviewed consolidated balance sheet of the Company as of March 31, 2022, each reviewed in accordance with the auditing standards of the PCAOB for public companies as required by the SEC in connection with the filing of the Registration Statement or the Proxy Statement (collectively, the “Reviewed Financial Statements”).
Section 7.17 Internal Controls. At the Closing, the Company will maintain systems of internal control over financial reporting that are sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including policies and procedures sufficient to provide reasonable assurance: (i) that the Company maintains records that in reasonable detail accurately and fairly reflect, in all material respects, its transactions and dispositions of assets; (ii) that transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP; (iii) that receipts and expenditures are being made only in accordance with authorizations of management and the board of directors; and (iv) regarding prevention or timely detection of unauthorized acquisition, use or disposition of its assets that could have a material effect on its financial statements. On or prior to the Closing, the Company shall deliver to Future Health a true and complete copy of any disclosure (or, if unwritten, a summary thereof) by any representative of the Company to the Company’s independent auditors relating to any material weaknesses in internal controls and any significant deficiencies in the design or operation of internal controls that would adversely affect the ability of the Company to record, process, summarize and report financial data.
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Article VIII.
CONDITIONS TO THE CLOSING
Section 8.01 Conditions to the Obligations of Each Party. The obligations of Seller, the Company, and Future Health to consummate the Transactions are subject to the satisfaction or waiver (where permissible) at or prior to the Closing of the following conditions:
(a) Future Health Stockholders’ Approval. The Future Health Proposals shall have been approved and adopted by the requisite affirmative vote of the stockholders of Future Health in accordance with the Proxy Statement, the DGCL, the Future Health Organizational Documents and the rules and regulations of Nasdaq.
(b) Effectiveness of Registration Statement. In the case that Future Health has filed the Registration Statement with the SEC, the Registration Statement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement shall be in effect and no proceedings for that purpose shall be pending before or threatened by the SEC.
(c) No Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law, rule, regulation, judgment, decree, executive order or award which is then in effect and has the effect of making the Transactions illegal or otherwise prohibiting consummation of the Transactions.
(d) HSR. All required filings under the HSR Act shall have been completed and any applicable waiting period (and any extension thereof) applicable to the consummation of the Transactions under the HSR Act shall have expired or been terminated.
(e) Consents. All consents, approvals and authorizations set forth on Section 8.01(e) of the Company Disclosure Schedule shall have been obtained from and made with all Governmental Authorities.
(f) PIPE Closing. The sale and issuance by Future Health of Future Health Common Stock in an aggregate amount equal to the PIPE Commitment and the Additional Shares shall have been consummated in accordance with the terms of the Subscription Agreement and the Forward Purchase Agreement, as applicable.
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(g) Stock Exchange Listing. The shares of Future Health Common Stock shall be listed on Nasdaq, or another national securities exchange mutually agreed to by the parties, as of the Closing Date.
(h) Reorganization. The Spin-Out and the Contributions shall have been completed and the Company and the other parties thereto shall have executed and delivered the Intercompany Agreements.
Section 8.02 Conditions to the Obligations of Future Health. The obligations of Future Health to consummate the Transactions are subject to the satisfaction or waiver (where permissible) at or prior to the Closing of the following additional conditions:
(a) Representations and Warranties. The representations and warranties of Seller and the Company contained in (i) Section 3.01, Section 3.02, Section 3.04, Section 4.01, Section 4.03 (other than clause (a) thereof, which is subject to clause (iii) below), Section 4.04 and Section 4.23 shall each be true and correct in all material respects as of the date hereof and the Closing (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such specified date), (ii) Section 4.08(c) shall be true and correct in all respects as of the date hereof and the Closing, (iii) Section 4.03(a) shall be true and correct in all respects as of the date hereof and as of the Closing as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such specified date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, be reasonably expected to result in more than de minimis additional cost, expense or liability to Seller, the Company, Future Health, or their Affiliates and (iv) the other provisions of Article III and Article IV shall be true and correct in all respects (without giving effect to any “materiality,” “Company Material Adverse Effect” or similar qualifiers contained in any such representations and warranties) as of the date hereof and as of the Closing as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failures of any such representations and warranties to be so true and correct, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.
(b) Agreements and Covenants. Seller and the Company shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing.
(c) Officer Certificate. Seller shall have delivered to Future Health a certificate, dated the date of the Closing, signed by an officer of Seller, certifying as to the satisfaction of the conditions specified in Section 8.02(a), Section 8.02(b) and Section 8.02(d).
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(d) Material Adverse Effect. No Company Material Adverse Effect shall have occurred between the date of this Agreement and the Closing Date.
(e) Resignation. Other than those persons identified as continuing directors by the parties, all members of the Company Board shall have executed written resignations effective as of the Closing.
(f) Registration Rights Agreement. All parties to the Registration Rights Agreement (other than Future Health and the Future Health stockholders party thereto) shall have delivered, or caused to be delivered, to Future Health copies of the Registration Rights Agreement, duly executed by all such parties.
(g) Employee Leasing Agreement; Office Lease Agreement; Laboratory Services Agreement. All parties to the Employee Leasing Agreement, the Office Lease Agreement and the Laboratory Services Agreement shall have delivered, or caused to be delivered, to Future Health copies of all such agreements duly executed by all such parties.
(h) FIRPTA Tax Certificate. The Company shall deliver to Future Health in a form reasonably acceptable to Future Health, dated as of the Closing Date, a properly executed certification that shares of the Company are not “U.S. real property interests” within the meaning of Section 897 of the Code, in accordance with Treasury Regulation Section 1.1445-2(c)(3), together with an executed notice to the IRS (which shall be filed by Future Health with the IRS following the Closing) in accordance with the provisions of Section 1.897-2(h)(2) of the Treasury Regulations.
(i) Contributions; Plan of Liquidation. The Contributions shall have occurred pursuant to the terms of the Contribution Agreements, and a true, complete and correct copy of the executed Contribution Agreements shall have been delivered to Future Health; and the Plan of Liquidation shall have been adopted and a true, complete and correct copy of the Plan of Liquidation shall have been delivered to Future Health.
(j) Insurance Matters. The Company shall have paid in full the D&O Policy and shall have provided Future Health with the D&O Policy insurance binder.
(k) Financial Statements. Future Health shall have received the Audited Financial Statements and the Reviewed Financial Statements.
(m) Regulatory Matters. Future Health shall have received written confirmation from Centers for Medicare & Medicaid Services that the Company is in full compliance with any requirements under the Direct Contracting Model, including any requirements relating to financial guarantee.
Section 8.03 Conditions to the Obligations of Seller and the Company. The obligations of Seller and the Company to consummate the Transactions, are subject to the satisfaction or waiver (where permissible) at or prior to Closing of the following additional conditions:
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(a) Seller Stockholders’ Approval. The Transactions, Reorganization and Plan of Liquidation shall have been approved and adopted by the requisite affirmative vote of the shareholders of Seller in accordance with Seller’s Articles of Incorporation and bylaws and applicable law.
(b) Representations and Warranties. The representations and warranties of Future Health contained in (i) Section 5.01, Section 5.03 (other than clause (a) thereof, which is subject to clause (iii) below), Section 5.04 and Section 5.11 shall each be true and correct in all material respects as of as of the date hereof and the Closing (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such specified date), (ii) Section 5.08(c) shall be true and correct in all respects as of the date hereof and the Closing, (iii) Section 5.03(a) shall be true and correct in all respects as of the date hereof and as of the Closing as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such specified date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, be reasonably expected to result in more than de minimis additional cost, expense or liability to Seller, the Company, Future Health or their Affiliates and (iv) the other provisions of Article V shall be true and correct in all respects (without giving effect to any “materiality,” “Future Health Material Adverse Effect” or similar qualifiers contained in any such representations and warranties) as of the date hereof and as of the Closing as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failures of any such representations and warranties to be so true and correct, individually or in the aggregate, would not reasonably be expected to have a Future Health Material Adverse Effect.
(c) Agreements and Covenants. Future Health shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing.
(d) Officer Certificate. Future Health shall have delivered to Seller a certificate, dated the date of the Closing, signed by the President of Future Health, certifying as to the satisfaction of the conditions specified in Section 8.03(a), Section 8.03(c) and Section 8.03(e).
(e) Material Adverse Effect. No Future Health Material Adverse Effect shall have occurred between the date of this Agreement and the Closing Date.
(f) Registration Rights Agreements. Future Health shall have delivered a copy of the Registration Rights Agreement duly executed by Future Health and the Future Health stockholders party thereto and Future Health shall have delivered a copy of the Earnout Shares Registration Rights Agreement in the form agreed upon by Future Health and Seller and duly executed by Future Health.
(g) Termination of the Future Health Insider Agreement. Future Health shall have delivered evidence of the termination of the Future Health Insider Agreement duly executed by Future Health and the Initial Stockholders party thereto.
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(h) Trust Fund. Future Health shall have made all necessary and appropriate arrangements with the Trustee to have all of the Trust Funds disbursed to Future Health immediately prior to the Closing, and all such funds released from the Trust Account shall be available to Future Health in respect of all or a portion of the payment obligations set forth in Section 7.13 and the payment of Future Health’s fees and expenses incurred in connection with this Agreement and the Transactions.
Article IX.
TERMINATION, AMENDMENT AND WAIVER
Section 9.01 Termination. This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Closing, notwithstanding any requisite approval and adoption of this Agreement and the Transactions by the stockholders of Future Health, as follows:
(a) by mutual written consent of Future Health and Seller; or
(b) by either Future Health or Seller if the Closing shall not have occurred prior to December 9, 2022 (the “Outside Date”); provided, however, that this Agreement may not be terminated under this Section 9.01(b) by or on behalf of any party that either directly or indirectly through its Affiliates is in breach or violation of any representation, warranty, covenant, agreement or obligation contained herein and such breach or violation is the principal cause of the failure of a condition set forth in Article VIII on or prior to the Outside Date; and provided, further, that in the event that any Law is enacted after the date hereof extending the applicable waiting period under the HSR Act, the Outside Date shall automatically be extended by the length of any such extension; or
(c) by either Future Health or Seller if any Governmental Authority in the United States shall have enacted, issued, promulgated, enforced or entered any injunction, order, decree or ruling (whether temporary, preliminary or permanent) which has become final and nonappealable and has the effect of making consummation of the Transactions illegal or otherwise preventing or prohibiting consummation of the Transactions; or
(d) by either Future Health or Seller if any of the Future Health Proposals shall fail to receive the requisite vote for approval at the Future Health Stockholders’ Meeting; or
(e) by Future Health upon a breach of any representation, warranty, covenant or agreement on the part of Seller or the Company set forth in this Agreement, or if any representation or warranty of Seller or the Company shall have become untrue, in either case such that the conditions set forth in Section 8.02(a) and Section 8.02(b) would not be satisfied (“Terminating Company Breach”); provided that Future Health has not waived such Terminating Company Breach and Future Health is not then in material breach of its representations, warranties, covenants or agreements in this Agreement; provided further that, if such Terminating Company Breach is curable by Seller or the Company, Future Health may not terminate this Agreement under this Section 9.01(e) for so long as Seller and the Company continue to exercise its reasonable efforts to cure such breach, unless such breach is not cured within thirty (30) days after notice of such breach is provided by Future Health to Seller; or
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(f) by Seller upon a breach of any representation, warranty, covenant or agreement on the part of Future Health set forth in this Agreement, or if any representation or warranty of Future Health shall have become untrue, in either case such that the conditions set forth in Section 8.03(b) and Section 8.03(c) would not be satisfied (“Terminating Future Health Breach”); provided that Seller has not waived such Terminating Future Health Breach and Seller and the Company are not then in material breach of any of their representations, warranties, covenants or agreements in this Agreement; provided, however, that, if such Terminating Future Health Breach is curable by Future Health, Seller may not terminate this Agreement under this Section 9.01(f) for so long as Future Health continue to exercise its reasonable efforts to cure such breach, unless such breach is not cured within thirty (30) days after notice of such breach is provided by Seller to Future Health; or
(g) by Future Health if the Audited Financial Statements and the Reviewed Financial Statements shall not have been delivered to Future Health by Seller on or before July 15, 2022; or
(h) by Future Health if the Company Disclosure Schedule shall not have been delivered, in form and substance acceptable to Future Health in its reasonable discretion, to Future Health by Seller and the Company on or before June 20, 2022; or
(i) by Future Health if any material regulatory matter arises, which is unknown to Future Health as of the date hereof, and not resolved in a satisfactory manner to Future Health in its sole discretion prior to Closing.
Section 9.02 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 9.01, this Agreement shall forthwith become void, and there shall be no liability under this Agreement on the part of any party hereto, except as set forth in Section 7.03, Section 7.10, this Section 9.02, Article X (collectively, the “Surviving Provisions”), and any corresponding definitions set forth in Article I and any other Section or Article of this Agreement referenced in such Surviving Provisions, or in the case of termination subsequent to a willful material breach of this Agreement by a party hereto. The Surviving Provisions and the Confidentiality Agreement shall in each case survive any termination of this Agreement.
Section 9.03 Expenses. Except as set forth in this Section 9.03 or elsewhere in this Agreement, all expenses incurred in connection with this Agreement and the Transactions shall be paid by the party incurring such expenses, whether or not any of the Transactions are consummated. For avoidance of doubt, the filing and registration fees contemplated by Section 7.01, the listing fees contemplated by Section 7.11 and the filing fees and expenses contemplated by Section 7.12 shall be paid one half by each of the parties hereto; provided, that each party further acknowledges that such party shall be responsible for the fees and expenses payable by such party to its respective Representatives with respect to such matters.
Section 9.04 Amendment. This Agreement may be amended in writing by the parties hereto at any time prior to the Closing. This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto.
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Section 9.05 Waiver. At any time prior to the Closing, (i) Future Health may (a extend the time for the performance of any obligation or other act of Seller or the Company, (b) waive any inaccuracy in the representations and warranties of Seller or the Company contained herein or in any document delivered by Seller or the Company pursuant hereto and (c) waive compliance with any agreement of Seller or the Company or any condition to its own obligations contained herein and (ii) Seller or the Company may (a) extend the time for the performance of any obligation or other act of Future Health, (b) waive any inaccuracy in the representations and warranties of Future Health contained herein or in any document delivered by Future Health pursuant hereto and (c) waive compliance with any agreement of Future Health or any condition to its own obligations contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby.
Article X.
GENERAL PROVISIONS
Section 10.01 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by email or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 10.01):
if to Future Health:
Future Health ESG Corp.
8 The Green, Suite #12081
Dover, DE 19901
Attention: Travis A. Morgan, Chief Financial Officer
Email: travis@fhesg.com
with a copy to:
McDermott Will & Emery LLP
1 Vanderbilt Avenue
New York, NY 10017
Attention: Ari Edelman
Email: aedelman@mwe.com;
if to Seller or the Company:
MacArthur Court Acquisition Corp.
2260 University Drive
Newport Beach, CA 92660
Attention: Brian Gillan
Email(s): Brian.Gillan@CCHealth.com
with a copy to:
Buchanan Ingersoll & Rooney PC
640 5th Avenue, 9th Floor
New York, NY 10019-6102
Attention: Richard DiStefano
Email: richard.distefano@bipc.com
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Section 10.02 Nonsurvival of Representations, Warranties and Covenants. None of the representations, warranties, covenants, obligations or other agreements in this Agreement or in any certificate, statement or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants, obligations, agreements and other provisions, shall survive the Closing and all such representations, warranties, covenants, obligations or other agreements shall terminate and expire upon the occurrence of the Closing (and there shall be no liability after the Closing in respect thereof), except for (a) those covenants and agreements contained herein or in any certificate, statement or instrument delivered pursuant to this Agreement that by their terms expressly apply in whole or in part after the Closing and then only with respect to any breaches occurring after the Closing, (b) this Article X and any corresponding definitions set forth in Article I and (c) those covenants and agreements herein relating to the Earnout Shares.
Section 10.03 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the Transactions be consummated as originally contemplated to the fullest extent possible.
Section 10.04 Entire Agreement; Assignment. This Agreement and the Transaction Document constitute the entire agreement among the parties with respect to the subject matter hereof and supersede, except as set forth in Section 7.03(b), all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof, except for the Confidentiality Agreement. This Agreement shall not be assigned (whether pursuant to a merger, by operation of law or otherwise) by any party without the prior express written consent of the other parties hereto.
Section 10.05 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, other than Section 7.07 (which is intended to be for the benefit of the persons covered thereby and may be enforced by such persons).
Section 10.06 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed in that State. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any Delaware Chancery Court; provided, that if jurisdiction is not then available in the Delaware Chancery Court, then any such Action may be brought in any federal court located in the State of Delaware or any other Delaware state court. The parties hereto hereby (a) irrevocably submit to the exclusive jurisdiction of the aforesaid courts for themselves and with respect to their respective properties for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, and (b) agree not to commence any Action relating thereto except in the courts described above in Delaware, other than Actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Action arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the Action in any such court is brought in an inconvenient forum, (ii) the venue of such Action is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
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Section 10.07 Waiver of Jury Trial. Each of the parties hereto hereby waives to the fullest extent permitted by applicable Law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement or the Transactions. Each of the parties hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other hereto have been induced to enter into this Agreement and the Transactions, as applicable, by, among other things, the mutual waivers and certifications in this Section 10.07.
Section 10.08 Headings. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
Section 10.09 Counterparts. This Agreement may be executed and delivered (including by facsimile or portable document format (pdf) transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
Section 10.10 Specific Performance.
(a) The parties acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and that monetary damages, even if available, would not be an adequate remedy therefor. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the performance of the terms and provisions of this Agreement, including the right of a party to cause the other parties to consummate the Transactions. It is agreed that the parties are entitled to enforce specifically the performance of terms and provisions of this Agreement, without proof of actual damages (and each such party hereby waives any requirement for the securing or posting of any bond in connection with such remedy), this being in addition to any other remedy to which they are entitled at law or in equity. Such Action shall be brought in the Court of Chancery of the State of Delaware or, if that court does not have jurisdiction, any court of the United States located in the State of Delaware. The parties further agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to any applicable Law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an adequate remedy for any such breach. Each of the parties hereby further waives any defense in any action for specific performance that a remedy at law would be adequate.
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(b) The parties further agree that Seller or would suffer irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties to the Subscription Agreement do not perform their obligations under the provisions of the Subscription Agreement (including failing to take such actions as are required of them thereunder to consummate the Private Placement) in accordance with its specified terms or otherwise breach such provisions. The parties acknowledge and agree that (i) if the parties to the Subscription Agreement do not perform their obligations under the provisions of the Subscription Agreement, then (1) Seller or shall have the right to either (at Seller’s election) (I) on behalf of Future Health, seek an injunction, specific performance, or other equitable relief, to prevent breaches of the Subscription Agreement and to enforce specifically the terms and provisions thereof, without proof of damages or (II) seek an injunction, specific performance, or other equitable relief, to cause Future Health to prevent breaches of the Subscription Agreement and to cause Future Health to enforce specifically the terms and provisions thereof, without proof of damages, in each case of the foregoing clauses (I) and (II), prior to the valid termination of this Agreement in accordance with Section 9.01, this being in addition to any other remedy to which it is entitled under this Agreement, and (2) Future Health shall not object or otherwise oppose any Action pursuant to which Seller or is exercising its rights pursuant to the foregoing clause (1), and (ii) the right of specific enforcement is an integral part of the Transactions and without that right, none of the parties would have entered into this Agreement.
(c) Notwithstanding anything to the contrary in this Agreement, if prior to the Outside Date any party initiates an Action to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, then the Outside Date will be automatically extended by: (A) the amount of time during which such Action is pending plus 20 Business Days; or (B) such other time period established by the court presiding over such Action.
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Section 10.11 No Recourse. All claims, obligations, liabilities, or causes of action (whether in contract or in tort, in law or in equity, or granted by statute) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement, or the negotiation, execution, or performance of this Agreement (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement), may be made only against (and such representations and warranties are those solely of) the persons that are expressly identified as parties in the preamble to this Agreement (the “Contracting Parties”) except as set forth in this Section 10.11. No person who is not a Contracting Party, including any current, former or future director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, attorney, Representative or assignee of, and any financial advisor or lender to, any Contracting Party, or any current, former or future director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, attorney, Representative or assignee of, and any financial advisor or lender to, any of the foregoing (collectively, the “Nonparty Affiliates”), shall have any liability (whether in contract or in tort, in law or in equity, or granted by statute) for any claims, causes of action, obligations, or liabilities arising under, out of, in connection with, or related in any manner to this Agreement or based on, in respect of, or by reason of this Agreement or its negotiation, execution, performance, or breach, except with respect to willful misconduct or common law fraud against the person who committed such willful misconduct or common law fraud, and, to the maximum extent permitted by applicable Law, each Contracting Party hereby waives and releases all such liabilities, claims, causes of action, and obligations against any such Nonparty Affiliates.
[Signature Page Follows.]
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IN WITNESS WHEREOF, Future Health, Seller and the Company have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
| FUTURE HEALTH ESG CORP. | ||
| By | /s/ Travis A. Morgan | |
| Name: Travis A. Morgan | ||
| Title: Chief Financial Officer | ||
| MACARTHUR COURT ACQUISITION CORP. | ||
| By | /s/ Sanjay Patil | |
| Name: Sanjay Patil | ||
| Title: Chief Executive Officer | ||
| EXCELERA DCE | ||
| By | /s/ Desmond Thio | |
| Name: Desmond Thio | ||
| Title: Chief Executive Officer | ||
[Signature Page to Business Combination Agreement and Plan of Reorganization]
EXHIBIT A
Form of Sponsor Stockholder Support Agreement
[Omitted]
EXHIBIT B
Form of Amended and Restated Registration Rights Agreement
[Omitted]
EXHIBIT C
Form of Lock-Up Agreement
[Omitted]
EXHIBIT D
Earnout Payment
| 1. | Definitions. Each capitalized term used and not otherwise defined in this Exhibit D has the meaning assigned to such term in the Business Combination Agreement to which this Exhibit D is attached (the "Agreement"). In addition, the following terms as used herein shall have the following meanings: |
“Commercially Reasonable Manner” means (i) providing the Business with a level of administrative, maintenance and marketing support that is consistent with the support being provided to the Business by the Company as of the Closing Date (as adjusted to take into consideration any growth of the Business during the Earnout Period) and (ii) providing the Company with sufficient funding or access to funding to enable the Company to continue to develop in the ordinary course of its business reflecting consistent with the Company's projections provided to Future Health prior to the date of the Agreement.
“Consolidated Revenues" means with respect to any fiscal quarter, the aggregate revenues of Future Health and all of its direct and indirect current and future Subsidiaries, including, without limitation, the Company and its current and future Subsidiaries, determined on a consolidated basis in accordance with GAAP, for such fiscal quarter.
“Going Private Transaction” means a transaction (or series of transactions) pursuant to Rule 13e-3 under the Exchange Act or otherwise with the result that upon conclusion of such transaction or transactions, Future Health ceases to be subject to reporting obligations under Sections 13 or 15(d) of the Exchange Act.
“Sale of the Company” shall mean any one or more of the following: (a) the acquisition by any unaffiliated third party Person or related group of Persons (other than Future Health or any of its Affiliates or direct or indirect subsidiaries), by way of sale, transfer or other acquisition, of all or substantially all of the assets or properties of the Company; or (b) the acquisition by any unaffiliated third party Person or related group of Persons (other than Future Health or any of its Affiliates or direct or indirect subsidiaries) of a majority of the equity securities of the Company (whether by merger, consolidation or otherwise).
| 2. | Earnout Payment. |
Due to the difficulty in determining the value of the assets involved in the Transaction, part of the Purchase Price is being paid via the issuance of contingent stock upon terms that comply with Rev. Proc. 84-42 (“Rev Proc. 84-42”). On the terms and subject to the conditions of the Agreement and this Exhibit D, Future Health will deliver (or cause to be delivered) to Seller or, in connection with Seller’s liquidation following the Closing or as otherwise permitted by Rev. Proc. 84-42, to an Affiliate of Seller or the shareholders of the Seller, the Earnout Shares (“Earnout Payment”) within five (5) Business Days after the filing (but in no event later than the fifth anniversary of the Closing Date) of the first Future Health Quarterly Report on Form 10-Q or Annual Report on Form 10-K (each prepared in accordance with GAAP) in which Consolidated Revenues (determined in accordance with GAAP) of Future Health in the most recent fiscal quarter included therein shall have exceeded One Hundred Fifty Million U.S. Dollars ($150,000,000), provided that such Earnout Shares shall only be payable if the filing of such Form 10-Q or Form 10-K occurs prior to the fifth anniversary of the Closing Date (the “Earnout Period”). The parties will endeavor in good faith to establish a mutually acceptable dispute resolution mechanism in connection with the calculations of Consolidated Revenues pursuant hereto. Notwithstanding anything to the contrary herein, all Earnout Shares required to be paid will be paid within 5 years of the Closing
In the event, and only in the event, of a Going Private Transaction prior to the end of the Earnout Period, Future Health will deliver (or cause to be delivered) to Seller or, in connection with Seller’s liquidation following the Closing or as otherwise permitted by Rev. Proc. 84-42, to an Affiliate of Seller or the shareholders of the Seller, a pro rata portion of the Earnout Shares (the “Going Private Earnout”), within five (5) Business Days after the closing of the Going Private Transaction, based on the most recently filed Future Health Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be, with such Going Private Earnout being the number of shares of Future Health Common Stock equal to the product of (a) 20,000,000 multiplied by (b) the difference of (A) the Consolidated Revenues (determined in accordance with GAAP) of Future Health in the most recent fiscal quarter included in such Form 10-Q or Form 10-K less (B) $88,000,000, being the agreed quarterly revenue for the first quarter of 2022, divided by (c) $62,000,000.
| 3. | Operation of the Business during the Earnout Period. |
Until the expiration of Earnout Period, Future Health covenants and agrees to act in good faith and operate the Business in a Commercially Reasonable Manner.
Until the expiration of the Earnout Period, Future Health covenants and agrees that it shall not, directly or indirectly, take any action (or fail to take any action) in bad faith or take any action (or fail to take any action) the primary intent of which is to reduce the amount of Consolidated Revenues. Future Health will, and will cause its Affiliates to, act in good faith in the exercise of its or their power, authority and control of the Business and any other business developed or acquired. In furtherance of the foregoing, Future Health shall not, and Future Health shall cause the Company not to, without the prior written consent of Sanjay Patil: (i) dissolve, liquidate or adopt any plan of dissolution or liquidation; or (ii) sell any material assets of the Business, if such sale is not related to a transaction in which the acquirer of the assets of the Business is not assuming all of Future Health's obligations arising under the Agreement, including this Exhibit D.
During the Earnout Period, Future Health shall consult in good faith with Sanjay Patil regarding the pursuit of any market opportunities to expand the Company's services that Sanjay Patil reasonably believes are in the best interests of the Company and shall utilize reasonable best efforts to pursue such market opportunities.
In the event of a consummation of a Sale of the Company prior to the end of the Earnout Period, Future Health shall cause the acquiring entity or successor to all or substantially all of the assets of the Company to assume the obligations of Future Health under this Exhibit D, including, without limitation, the obligation to pay the Earnout Payment, in the same manner and to the same extent that Future Health would be required to perform if no Sale of the Company had taken place.
| 4. | Tax Reporting; Tax Matters |
Future Health and Seller agree that for federal, state and local income tax purposes, the Earnout Shares shall be treated as additional consideration for the sale of the Company Common Stock that can be received without imposition of tax except to the extent required by applicable law to be characterized as an imputed interest payment. Payment of the Earnout Shares shall not be considered royalty payments or compensation. Future Health shall cause such Earnout Payment to be reported in good faith in accordance with this Section 4 of this Exhibit D.
Notwithstanding anything in this Agreement to the contrary, the right to receive the Earnout Shares under this Agreement may not be assigned or transferred, other than as may be permitted in accordance with Rev. Proc. 84-42.
| 5. | Registration Rights. |
In connection with the Closing, Future Health and Seller shall enter into the Earnout Shares Registration Rights Agreement with respect to the Earnout Shares.
SCHEDULE A
Anchor Investors and Future Health Initial Stockholders
Anchor Investors:
| AG OFCON LTD |
| AG ONCON LLC |
| BLACKWELL PARTNERS LLC-SERIES A |
| CAAS CAPITAL MASTER FUND LP |
| CITADEL CEMF INVESTMENTS LTD |
| CONTEXT PARTNERS MASTER FUND LP |
| KEPOS ALPHA MASTER FUND L.P. |
| KEPOS SPECIAL OPPORTUNITIES MASTER FUND L.P |
| LMR CCSA MASTER FUND LIMITED |
| LMR MASTER FUND LIMITED |
| MASO CAPITAL INVESTMENTS LIMITED |
| STAR V PARTNERS LLC |
| MAGNETAR CONSTELLATION FUND II, LTD |
| MAGNETAR CONSTELLATION MASTER FUND, LTD |
| MAGNETAR STRUCTURED CREDIT FUND, LP |
| MAGNETAR CAPITAL MASTER FUND, LTD |
| MAGNETAR LAKE CREDIT FUND LLC |
| MAGNETAR SC FUND LTD |
| MAGNETAR XING HE MASTER FUND LTD |
| MAGNETAR DISCOVERY MASTER FUND LTD |
| METEORA CAPITAL PARTNERS LP |
| MMCAP INTERNATIONAL INC. SPC |
| POLAR MULTI-STRATEGY MASTER FUND |
| PURPOSE ALTERNATIVE CREDIT FUND - T LLC |
| PURPOSE ALTERNATIVE CREDIT FUND LTD |
| TENOR OPPORTUNITY MASTER FUND LTD |
Future Health Initial Stockholders:
| BEA HOLDINGS LLC |
| FUTURE HEALTH ESG ASSOCIATES 1 LLC |
| HC1.COM INC |
| R Mark Lubbers |
| M2 ENTERPRISES HOLDINGS LLC |
| MB EQUITY LLC |
|
F John Mills Nancy L Snyderman |
SCHEDULE B
Knowledge Parties of Seller and Company
Sanjay Patil
Brian Gillan
Desmond Thio
Exhibit 10.1
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into this 13th day of June, 2022, by and between Future Health ESG Corp., a Delaware corporation (the “Issuer”), and the undersigned subscriber party set forth on the signature page hereto (“Subscriber”).
WHEREAS, concurrently with the execution and delivery of this Subscription Agreement, the Issuer is entering into that certain Business Combination Agreement and Plan of Reorganization, dated as of the date of this Subscription Agreement (as may be amended or supplemented from time to time, the “BCA”), among the Issuer, Excelera DCE (“Target”) and MacArthur Court Acquisition Corp. (“MCAC”), pursuant to which the Issuer will acquire 100% of the issued and outstanding stock of Target from MCAC in consideration of the issuance by the Issuer of 40,000,000 shares of the Issuer’s common stock, par value $0.0001 per share (“Shares”) and 20,000,000 Earnout Shares, on the terms and subject to the conditions set forth therein (the “Transaction”);
WHEREAS, in connection with the Transaction, on the terms and subject to the conditions set forth in this Subscription Agreement, Subscriber desires to subscribe for and purchase from the Issuer the number of Shares set forth on the signature page hereto (the “Acquired Shares”) for a purchase price of $11.00 per share (the “Share Purchase Price”), or the aggregate purchase price set forth on the signature page hereto (the “Purchase Price”), and the Issuer desires to issue and sell to Subscriber the Acquired Shares in consideration of the payment of the Purchase Price by or on behalf of Subscriber to the Issuer on or prior to the Closing Date (as defined herein);
WHEREAS, in connection with the Transaction, certain other “accredited investors” (as such term is defined in Rule 501 under the Securities Act of 1933, as amended (the “Securities Act”, and each such “accredited investor”, an “Other Subscriber”)), have entered into subscription agreements with the Issuer substantially similar to this Subscription Agreement, pursuant to which such Other Subscribers have agreed to subscribe for and purchase, and the Issuer has agreed to issue and sell to such Other Subscribers, on the Closing Date, Shares at the Share Purchase Price (the “Other Subscription Agreements”); and
WHEREAS, as of the date hereof, the aggregate amount of proceeds to be delivered to the Issuer in connection with the purchase and sale of the Shares pursuant to this Subscription Agreement and the Other Subscription Agreements entered into on the date hereof equals $100,000,000 and the aggregate number of Shares to be sold by Issuer pursuant to this Subscription Agreement and the Other Subscription Agreements entered into on the date hereof equals 9,090,909 Shares.
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Subscription and Escrow. Subject to the terms and conditions hereof, Subscriber hereby agrees to subscribe for and purchase, and the Issuer hereby agrees to issue and sell to Subscriber, upon the payment of the Purchase Price, the Acquired Shares (such subscription and issuance, the “Subscription”). As promptly as practicable after execution hereof and in no event later than five (5) business days following the delivery of the Audited Financial Statements (as defined in the BCA) in accordance with Section 7.16 of the BCA, or such later date as approved by the Issuer, Subscriber shall place the Purchase Price in an interest-bearing escrow account (the “Escrow Account”) administered by Continental Stock Transfer & Trust Company, as escrow agent, or another entity acceptable to Issuer, acting as escrow agent (the “Escrow Agent”) and pursuant to an escrow agreement with such Escrow Agent (the “Escrow Agreement”) acceptable to Issuer.
2. Closing.
a. Subject to the satisfaction or waiver of the conditions set forth in Section 2(c), the closing of the Subscription contemplated hereby (the “Closing”) shall occur on the date of, and at a time immediately prior to, the closing of the Transaction (such date, the “Closing Date”). Not less than two (2) business days prior to the Closing Date, the Issuer shall provide written notice to Subscriber and Escrow Agent (the “Closing Notice”) of the Closing Date.
b. Subject to the satisfaction or waiver of the conditions set forth in Section 2(c) (other than those conditions that by their nature are to be satisfied at Closing, but without affecting the requirement that such conditions be satisfied or waived at Closing):
(i) The Escrow Agent shall deliver to the Issuer on the Closing Date (unless otherwise agreed by the Issuer) the Purchase Price for the Acquired Shares by wire transfer of U.S. dollars in immediately available funds to the account specified by the Issuer in the Closing Notice; and
(ii) On the Closing Date, the Issuer shall (A) establish at the Issuer’s transfer agent in book entry form on behalf of Subscriber the Acquired Shares, free and clear of any liens or other restrictions whatsoever (other than those arising under state or federal securities laws), in the name of Subscriber (or its nominee in accordance with its delivery instructions) or to a custodian designated by Subscriber, as applicable, and (B) deliver evidence of such issuance of the Acquired Shares to Subscriber from the Issuer’s transfer agent. Each book entry for the Acquired Shares shall contain a notation in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
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c. The Closing shall be subject to the satisfaction on the Closing Date, or the waiver by each of the parties hereto, of each of the following conditions:
(i) no suspension of any qualification of the Acquired Shares for offering or sale or trading in any jurisdiction, or initiation or threatening of any proceedings for any of such purposes, shall have occurred;
(ii) all representations and warranties of the Issuer and Subscriber contained in this Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect (as defined herein), which representations and warranties shall be true in all respects) at and as of the Closing Date, and consummation of the Closing shall constitute a reaffirmation by each of the Issuer and Subscriber of each of the representations, warranties and agreements of each such party contained in this Subscription Agreement as of the Closing Date (other than those representations and warranties expressly made as of an earlier date, which shall be true and correct in all material respects as of such earlier date);
(iii) each of the Issuer and Subscriber shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of the Issuer to consummate the Closing;
(iv) no governmental authority shall have enacted, issued, promulgated, enforced or entered any material judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or otherwise preventing or prohibiting consummation of the transactions contemplated hereby, and no governmental authority shall have instituted or threatened in writing a proceeding seeking to impose any such prevention or prohibition;
(v) no Future Health Material Adverse Effect (as defined in the BCA) shall have been declared by MCAC or Company Material Adverse Effect (as defined in the BCA) shall have been declared by the Issuer between the date hereof and the Closing Date; and
(vi) all conditions precedent to the closing of the Transaction, including all necessary approvals of the Issuer’s stockholders and regulatory approvals, if any, shall have been satisfied or waived (other than those conditions that may only be satisfied at the closing of the Transaction, but subject to satisfaction of such conditions as of the closing of the Transaction).
d. At the Closing, the parties hereto shall execute and deliver such additional documents and take such additional actions as the parties reasonably may deem to be practical and necessary in order to consummate the Subscription as contemplated by this Subscription Agreement.
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e. In the event the Transaction does not occur within one (1) business day of the Closing, the Issuer shall promptly (but not later than two (2) business days thereafter) return the Purchase Price to Subscriber, and any book entries shall be deemed cancelled. For purposes of this Subscription Agreement, “business day” means any day on which the principal offices of the Securities and Exchange Commission in Washington, D.C. are open to accept filings.
3. Issuer Representations and Warranties. The Issuer represents and warrants that:
a. The Issuer has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Subscription Agreement.
b. The Acquired Shares have been duly authorized and, when issued and delivered to Subscriber against full payment for the Acquired Shares in accordance with the terms of this Subscription Agreement and registered with the Issuer’s transfer agent, the Acquired Shares will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s certificate of incorporation and bylaws or under the laws of the State of Delaware.
c. This Subscription Agreement and the Other Subscription Agreements have been, and the BCA after the approval of the stockholders of Issuer will be, duly authorized. The Subscription Agreement, the Other Subscription Agreements, and the BCA (collectively, the “Transaction Documents”) have been duly executed and delivered by the Issuer and are enforceable against the Issuer in accordance with their respective terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
d. The execution and delivery by the Issuer of the Transaction Documents, and the performance by the Issuer of its obligations under the Transaction Documents, including the issuance and sale of the Acquired Shares and the consummation of the other transactions contemplated herein, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject, which would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, properties, financial condition, stockholders’ equity or results of operations of the Issuer (a “Material Adverse Effect”) or materially affect the validity of the Acquired Shares or the legal authority of the Issuer to comply in all material respects with the terms of this Subscription Agreement; (ii) the organizational documents of the Issuer; or (iii) subject to obtaining approval of the stockholders of Issuer , any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or materially affect the validity of the Acquired Shares or the legal authority of the Issuer to comply in all material respects with this Subscription Agreement.
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e. There are no securities or instruments issued by or to which the Issuer is a party containing anti-dilution or similar provisions that will be triggered by the issuance of (i) the Acquired Shares or (ii) the Shares to be issued pursuant to any Other Subscription Agreement, in each case, that have not been or will not be validly waived on or prior to the Closing Date.
f. The Issuer is not in default or violation (and no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation) of any term, condition or provision of (i) the organizational documents of the Issuer, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, permit, franchise or license to which the Issuer is now a party or by which the Issuer’s properties or assets are bound or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties, except, in the case of clauses (ii) and (iii), for defaults or violations that have not had and would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
g. The Issuer is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution, delivery and performance by the Issuer of this Subscription Agreement (including, without limitation, the issuance of the Acquired Shares), other than (i) the filing with the Securities and Exchange Commission (the “Commission”) of a registration statement registering the resale of the Acquired Shares; (ii) if necessary or appropriate, the approval of the Issuer’s stockholders of an increase in the authorized shares of the Issuer’s common stock and the filing of an amended and restated certificate of incorporation authorizing a sufficient number of authorized shares of Issuer’s common stock to issue the Acquired Shares and the Shares purchased by the Other Subscribers pursuant to the Other Subscription Agreements; (iii) filings required by applicable state or federal securities laws; (iv) the filings required in accordance with Section 9(n); (v) those required by the Nasdaq Capital Market (“NASDAQ”), including with respect to obtaining stockholder approval; and (vi) those consents, waivers, authorizations, orders, notices, filing, or registrations the failure of which to make or obtain would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect or materially affect the validity of the Acquired Shares or the legal authority of the Issuer to comply in all material respects with this Subscription Agreement.
h. The Acquired Shares are not, and following the Closing and the closing of the Transaction will not be, subject to any Transfer Restriction. The term “Transfer Restriction” means any condition to or restriction on the ability of the undersigned to pledge, sell, assign or otherwise transfer the Acquired Shares under any organizational document, policy or agreement of, by or with the Issuer, but excluding (i) the restrictions on transfer described in Section 4(e) of this Subscription Agreement with respect to the status of the Acquired Shares as “restricted securities” pending their registration for resale under the Securities Act in accordance with the Registration Rights (as defined below), and (ii) the restrictions on transfer described in Section 6(b) of this Subscription Agreement.
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i. The authorized capital stock of the Issuer consists of (i) 5,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”) and, as of the date hereof and as of immediately prior to the Closing, no shares of Preferred Stock are and will be issued and outstanding; (ii) 500,000,000 Shares and, as of the date hereof and as of immediately prior to the Closing, 25,000,000 Shares are and will be issued and outstanding; and (iii) 17,375,000 warrants, each entitling the holder thereof to purchase one Share at an exercise price of $11.50 per Share, are outstanding. All (a) issued and outstanding Shares have been duly authorized and validly issued, are fully paid and non-assessable and are not subject to preemptive rights and (b) outstanding warrants have been duly authorized and validly issued, are fully paid and are not subject to preemptive rights. As of the date hereof, except as set forth above and pursuant to (x) the Other Subscription Agreements and other subscription agreements, or (y) the BCA (including the exhibits and schedules thereto), there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Issuer any Shares or other equity interests in the Issuer (collectively, “Equity Interests”) or securities convertible into or exchangeable or exercisable for Equity Interests. As of the date hereof, the Issuer has no subsidiaries and does not own, directly or indirectly, interests or investments (whether equity or debt) in any person, whether incorporated or unincorporated. There are no stockholder agreements, voting trusts or other agreements or understandings to which the Issuer is a party or by which it is bound relating to the voting of any Equity Interests, other than (A) as disclosed in the SEC Documents (as defined below) and (B) as contemplated by the BCA.
j. The Issuer has not received any written communication from a governmental entity that alleges that the Issuer is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.
k. The issued and outstanding Shares are registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are listed for trading on NASDAQ. There is no suit, action, proceeding or investigation pending or, to the knowledge of the Issuer, threatened against the Issuer by NASDAQ or the Commission with respect to any intention by such entity to deregister the Shares or prohibit or terminate the listing of the Shares on NASDAQ. The Issuer has taken no action that is designed to terminate the registration of the Shares under the Exchange Act.
l. Assuming the accuracy of Subscriber’s representations and warranties set forth in Section 4, no registration under the Securities Act is required for the offer and sale of the Acquired Shares by the Issuer to Subscriber in the manner contemplated by this Subscription Agreement.
m. Neither the Issuer nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) in connection with any offer or sale of the Acquired Shares.
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n. The Issuer has not entered into any side letter or similar agreement with any Other Subscriber in connection with such Other Subscriber’s direct or indirect investment in the Issuer other than (i) the BCA; (ii) the Other Subscription Agreements; and (iii) forward purchase agreements substantially similar to the one between the Issuer and Subscriber; provided, no Other Subscription Agreement includes terms and conditions that are materially more advantageous to any such Other Subscriber than Subscriber hereunder. The Other Subscription Agreements have not been amended in any material respect following the date of this Subscription Agreement and reflect the same Share Purchase Price and terms that are no more favorable to any such Other Subscriber thereunder than the terms of this Subscription Agreement.
o. The Issuer has made available to Subscriber (including via the Commission’s EDGAR system) a copy of each form, report, statement, schedule, prospectus, proxy, registration statement and other document, if any, filed by the Issuer with the Commission since its initial registration of the Shares (the “SEC Documents”), which SEC Documents, as of their respective filing dates, complied in all material respects with the requirements of the Securities Act and Exchange Act applicable to the SEC Documents and the rules and regulations of the Commission promulgated thereunder applicable to the SEC Documents. None of the SEC Documents (except to the extent that information contained in any SEC Document has been superseded by a later timely filed SEC Document) contained when filed any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, that, with respect to the proxy statement to be filed by the Issuer with respect to the Transaction or any of its affiliates included in any SEC Document or filed as an exhibit thereto, the representation and warranty in this sentence is made to the Issuer’s knowledge. The Issuer has timely filed each report, statement, schedule, prospectus, and registration statement that the Issuer was required to file with the Commission since its inception. The financial statements of the Issuer included in the SEC Documents comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing and fairly present in all material respects the financial position of the Issuer as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.
p. There are no material outstanding or unresolved comments in comment letters from the staff of the Commission with respect to any of the SEC Documents.
q. Except for such matters as have not had and would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect, there is no (i) proceeding pending, or, to the knowledge of the Issuer, threatened against the Issuer or (ii) judgment, decree, injunction, ruling or order of any governmental entity or arbitrator outstanding against the Issuer.
r. Except for placement fees payable to the Interlink Group, in its capacity as placement agent for the offer and sale of the Acquired Shares (in such capacity, the “Placement Agent”), the Issuer has not paid, and is not obligated to pay, any brokerage, finder’s or other commission or similar fee in connection with its issuance and sale of the Acquired Shares, including, for the avoidance of doubt, any fee or commission payable to any stockholder or affiliate of the Issuer.
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4. Subscriber Representations and Warranties. Subscriber represents and warrants that:
a. Subscriber has been duly formed or incorporated and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation, with the requisite entity power and authority to enter into, deliver and perform its obligations under this Subscription Agreement.
b. This Subscription Agreement has been duly authorized, executed and delivered by Subscriber. This Subscription Agreement is enforceable against Subscriber in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
c. The execution and delivery by Subscriber of this Subscription Agreement, and the performance by Subscriber of its obligations under this Subscription Agreement, including the purchase of the Acquired Shares and the consummation of the other transactions contemplated herein, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of Subscriber pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber is a party or by which Subscriber is bound or to which any of the property or assets of Subscriber is subject, which would reasonably be expected to have a material adverse effect on the business, properties, financial condition, stockholders’ equity or results of operations of Subscriber, taken as a whole (a “Subscriber Material Adverse Effect”), or materially affect the legal authority of Subscriber to comply in all material respects with the terms of this Subscription Agreement; (ii) the organizational documents of Subscriber; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over Subscriber or any of Subscriber’s properties that would reasonably be expected to have a Subscriber Material Adverse Effect or materially affect the legal authority of Subscriber to comply in all material respects with this Subscription Agreement. Sale or transfer of the Acquired Shares shall be governed by that certain Escrow Agreement executed concurrently herewith.
d. Subscriber (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act), in each case, satisfying the applicable requirements set forth on Schedule A, (ii) is acquiring the Acquired Shares only for its own account and not for the account of others, or if Subscriber is subscribing for the Acquired Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” (as defined above) and Subscriber has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account and (iii) is not acquiring the Acquired Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or any other securities laws of the United States or any other jurisdiction. Subscriber has completed Schedule A following the signature page hereto and the information contained therein is accurate and complete. Subscriber is not an entity formed for the specific purpose of acquiring the Acquired Shares.
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e. Subscriber understands that the Acquired Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Acquired Shares have not been registered under the Securities Act. Subscriber understands that the Acquired Shares may not be resold, Transferred, pledged or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (iii) pursuant to Rule 144 under the Securities Act, provided that all of the applicable conditions thereof have been met or (iv) pursuant to another applicable exemption from the registration requirements of the Securities Act (including without limitation, a private resale pursuant to the so-called Section 4(a)(1-½) exemption), and that any certificates or book-entry records representing the Acquired Shares shall contain a legend to such effect. Subscriber acknowledges that the Acquired Shares will not be eligible for resale pursuant to Rule 144A promulgated under the Securities Act. Subscriber understands and agrees that the Acquired Shares will be subject to transfer restrictions and, as a result of these transfer restrictions, Subscriber may not be able to readily resell the Acquired Shares and may be required to bear the financial risk of an investment in the Acquired Shares for an indefinite period of time. Subscriber understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or Transfer of any of the Acquired Shares. For purposes of this Subscription Agreement “Transfer” shall mean any direct or indirect transfer, redemption, disposition or monetization in any manner whatsoever, including, without limitation, through any derivative transactions.
f. All consents, approvals, orders, authorizations, registrations, qualifications, designations, declarations or filings with any governmental or other authority on the part of Subscriber required in connection with the consummation of the transactions contemplated in this Subscription Agreement have been obtained and are effective. No consent, approval, order, authorization, registration, qualification, designation, declaration or filing with any governmental or other authority is needed with respect to the transfer of funds from the account where they are currently held to the Escrow Account.
g. Subscriber understands and agrees that Subscriber is purchasing the Acquired Shares directly from the Issuer. Subscriber further acknowledges that there have been no representations, warranties, covenants and agreements made to Subscriber by the Issuer or any of its officers or directors, the Placement Agent or any of its officers, employees or representatives, or any other party to the transaction, expressly or by implication, other than those representations, warranties, covenants and agreements included in this Subscription Agreement.
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h. Subscriber’s acquisition and holding of the Acquired Shares will not constitute or result in a non-exempt prohibited transaction under section 406 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or any applicable similar law.
i. In making its decision to subscribe for and purchase the Acquired Shares, Subscriber represents that it has relied solely upon its own independent investigation. Without limiting the generality of the foregoing, Subscriber has not relied on any statements or other information provided by the Placement Agent or any of their respective affiliates, or any of their respective officers, directors, employees or representatives, concerning the Issuer or the Acquired Shares or the offer and sale of the Acquired Shares. Subscriber acknowledges and agrees that Subscriber has received such information as Subscriber deems necessary in order to make an investment decision with respect to the Acquired Shares, including with respect to the Issuer and the Transaction. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and such Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Acquired Shares.
j. Subscriber became aware of this offering of the Acquired Shares solely by means of direct contact between Subscriber and the Issuer or the Placement Agent, and the Acquired Shares were offered to Subscriber solely by direct contact between Subscriber and the Issuer or the Placement Agent. Subscriber did not become aware of this offering of the Acquired Shares, nor were the Acquired Shares offered to Subscriber, by any other means. Subscriber acknowledges that the Issuer represents and warrants that the Acquired Shares (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.
k. Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Acquired Shares. Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Acquired Shares, and Subscriber has sought such accounting, legal and tax advice as Subscriber has considered necessary to make an informed investment decision.
l. Subscriber acknowledges and agrees that neither the Placement Agent nor any affiliate of any of the Placement Agent (nor any officer, director, employee or representative of the Placement Agent or any affiliate thereof) has provided Subscriber with any information or advice with respect to the Acquired Shares nor is such information or advice necessary or desired. Subscriber acknowledges that none of the Placement Agent, any affiliate of any of the Placement Agent or any of their respective officers, directors, employees or representatives (i) have made any representation as to the Issuer or the quality of the Acquired Shares, (ii) have made any independent investigation with respect to the Issuer or the Acquired Shares or the accuracy, completeness or adequacy of any information supplied to Subscriber by the Issuer, (iii) have acted as Subscriber’s financial advisor or fiduciary in connection with the issue and purchase of the Acquired Shares or (iv) have prepared a disclosure or offering document in connection with the offer and sale of the Acquired Shares. Subscriber acknowledges that the Placement Agent, affiliates of any of the Placement Agent or their respective officers, directors, employees or representatives may have acquired non-public information with respect to the Issuer which Subscriber agrees need not be provided to it.
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m. Alone, or together with any professional advisor(s), Subscriber represents and acknowledges that Subscriber has adequately analyzed and fully considered the risks of an investment in the Acquired Shares and determined that the Acquired Shares are a suitable investment for Subscriber and that Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of Subscriber’s investment in the Issuer. Subscriber acknowledges specifically that a possibility of total loss exists.
n. Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Acquired Shares or made any findings or determination as to the fairness of an investment in the Acquired Shares.
o. Subscriber is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons, the Executive Order 13599 List, the Foreign Sanctions Evaders List, or the Sectoral Sanctions Identification List, each of which is administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) (collectively “OFAC Lists”), (ii) owned or controlled by, or acting on behalf of, a person, that is named on an OFAC List, (iii) organized, incorporated, established, located, resident or born in, or a citizen, national, or the government, including any political subdivision, agency, or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine, or any other country or territory embargoed or subject to substantial trade restrictions by the United States, (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515 or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (collectively, a “Prohibited Investor”). Subscriber represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. section 5311 et seq.) (the “BSA”), as amended by the USA PATRIOT Act of 2001 (the “PATRIOT Act”), and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that Subscriber maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Subscriber also represents that, to the extent required, it maintains policies and procedures reasonably designed to ensure compliance with OFAC-administered sanctions programs, including for the screening of its investors against the OFAC Lists. Subscriber further represents and warrants that, to the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by Subscriber and used to purchase the Acquired Shares were legally derived.
p. If Subscriber is an employee benefit plan that is subject to ERISA, a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Code or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, then Subscriber represents and warrants that neither the Issuer, nor any of its respective affiliates (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Acquired Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or Transfer the Acquired Shares.
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q. Subscriber has, and at the Closing will have, sufficient funds to pay the Purchase Price pursuant to Sections 1 and 2(b)(i).
5. Additional Subscriber Agreement. Subscriber hereby agrees that, from the date of this Subscription Agreement, none of Subscriber, its controlled affiliates, or any person or entity acting on behalf of Subscriber or any of its controlled affiliates or pursuant to any understanding with Subscriber or any of its controlled affiliates will engage in any Short Sales with respect to securities of the Issuer prior to the Closing. For purposes of this Section 5, “Short Sales” shall include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, and all types of direct and indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-U.S. broker dealers or foreign regulated brokers. Notwithstanding the foregoing, (i) nothing herein shall prohibit other entities under common management with Subscriber that have no knowledge of this Subscription Agreement or of Subscriber’s participation in the Transaction (including Subscriber’s controlled affiliates and/or affiliates) from entering into any Short Sales and (ii) in the case of a Subscriber that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Subscriber’s assets and the portfolio managers have no knowledge of the investment decisions made by the portfolio managers managing other portions of such Subscriber’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Acquired Shares covered by this Subscription Agreement.
6. Registration Rights and Lockup Agreement.
a. Subscriber will be granted registration rights by Issuer (“Registration Rights”) with respect to the Acquired Shares pursuant to an amended and restated registration rights agreement to be entered into with Issuer, the form of which is attached as an exhibit to the BCA.
b. The Acquired Shares will be subject to a lock-up agreement, dated as of the date hereof, by and among Issuer, Subscriber and the other parties thereto, the form of which is attached as an exhibit to the BCA.
7. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect (except for those provisions expressly contemplated to survive termination of this Subscription Agreement in accordance with Section 9(d)), and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof (except for those provisions expressly contemplated to survive termination of this Subscription Agreement in accordance with Section 9(d)), upon the earlier to occur of (a) such date and time as the BCA is terminated in accordance with the terms therein, (b) upon the mutual written agreement of each of the parties hereto to terminate this Subscription Agreement, (c) if any of the conditions to Closing set forth in Section 2(c) are not satisfied or waived on or prior to the Closing Date and, as a result thereof, the transactions contemplated by this Subscription Agreement are not consummated at the Closing or (d) at the election of Subscriber, on or after December 14, 2022 if the Closing has not occurred on or prior to such date; provided, that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover out-of-pocket losses, liabilities or damages arising from such breach. The Issuer shall promptly notify Subscriber of the termination of the BCA after the termination of such agreement.
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8. Trust Account Waiver. Subscriber acknowledges that the Issuer is a blank check company with the powers and privileges to effect a merger, asset acquisition, reorganization or similar business combination involving the Issuer and one or more businesses or assets. Subscriber further acknowledges that, as described in the Issuer’s prospectus relating to its initial public offering dated September 9, 2021 (the “Prospectus”), available at www.sec.gov, substantially all of the Issuer’s assets consist of the cash proceeds of the Issuer’s initial public offering and private placements of its securities, and substantially all of those proceeds have been deposited in a trust account (the “Trust Account”) for the benefit of the Issuer, its public stockholders and the underwriters of the Issuer’s initial public offering. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Issuer to pay for taxes, the cash in the Trust Account may be disbursed only for the purposes set forth in the Prospectus. For and in consideration of the Issuer entering into this Subscription Agreement, the receipt and sufficiency of which are hereby acknowledged, Subscriber, on behalf of itself and its representatives, agrees that it does not have any right, title or interest, or any claim of any kind in the monies held in the Trust Account (each, a “Claim”) and hereby waives any Claim they have or may have in the future arising out of this Subscription Agreement or otherwise, in or to any monies held in the Trust Account, and agrees not to seek recourse against the Trust Account as a result of, or arising out of, this Subscription Agreement or otherwise; provided, however, that nothing in this Section 8 shall be deemed to limit any Subscriber’s right, title, interest or claim to the Trust Account by virtue of such Subscriber’s record or beneficial ownership of securities of the Issuer acquired by any means other than pursuant to this Subscription Agreement, including but not limited to any redemption right with respect to any such securities of the Issuer.
9. Miscellaneous.
a. Each party hereto acknowledges that the other party hereto, the Placement Agent and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, each party hereto agrees to promptly notify the other party hereto if any of the acknowledgments, understandings, agreements, representations and warranties made by such party as set forth herein are no longer accurate in all material respects. Subscriber further acknowledges and agrees that the Placement Agent is a third-party beneficiary of the representations and warranties of Subscriber contained in Section 4.
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b. Each of the Issuer and Subscriber is entitled to rely upon this Subscription Agreement and is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby to the extent required by law or by regulatory bodies.
c. Notwithstanding anything to the contrary in this Subscription Agreement, prior to the Closing, Subscriber may transfer or assign all or a portion of its rights under this Subscription Agreement; provided, that, such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Subscription Agreement, makes the representations and warranties in Section 4 and completes Schedule A hereto. In the event of such a transfer or assignment, Subscriber shall update Schedule B to provide the information required therein.
d. All the agreements, representations and warranties made by each party hereto in this Subscription Agreement shall survive the Closing.
e. The Issuer may request from Subscriber such additional information as the Issuer may reasonably deem necessary to evaluate the eligibility of Subscriber to acquire the Acquired Shares, and Subscriber shall provide such information as may be reasonably requested, to the extent readily available and to the extent consistent with its internal policies and procedures; provided, that the Issuer agrees to keep any such information provided by Subscriber confidential.
f. This Subscription Agreement may not be amended, modified, waived or terminated except by an instrument in writing, signed by the party against whom enforcement of such amendment, modification, waiver, or termination is sought.
g. This Subscription Agreement and the Escrow Agreement constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof and thereof.
h. Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.
i. If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
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j. This Subscription Agreement may be executed in two (2) or more counterparts (including by electronic means), all of which shall be considered one and the same agreement and shall become effective when signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.
k. Each party shall pay all of its own expenses in connection with this Subscription Agreement and the transactions contemplated herein.
l. Any notice or communication required or permitted hereunder shall be in writing and either delivered personally, emailed or telecopied, sent by overnight mail via a reputable overnight carrier, or sent by certified or registered mail, postage prepaid, and shall be deemed to be given and received (a) when so delivered personally, (b) upon receipt of an appropriate electronic answerback or confirmation when so delivered by telecopy (to such number specified below or another number or numbers as such person may subsequently designate by notice given hereunder), (c) when sent, with no mail undeliverable or other rejection notice, if sent by email, or (d) five (5) business days after the date of mailing to the address below or to such other address or addresses as such person may hereafter designate by notice given hereunder:
(i) if to Subscriber, to such address or addresses set forth on the signature page hereto;
(ii) if to the Issuer, to:
Future Health ESG Corp.
Attn: Travis Morgan
8 The Green, Suite 12081
Dover, DE 19901
E-mail: travis@fhesg.com
with a required copy to (which copy shall not constitute notice):
McDermott Will & Emery LLP
One Vanderbilt Avenue
New York, NY 10017
Attention: Ari Edelman
Email:aedelmean@mwe.com
m. This Subscription Agreement and the Escrow Agreement, and any claim or cause of action based upon, arising out of or related to either agreement (whether based on law, in equity, in contract, in tort or any other theory) or the negotiation, execution, performance or enforcement of either agreement, shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of law thereof.
15
THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, THE SUPREME COURT OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF NEW YORK SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS SUBSCRIPTION AGREEMENT AND THE DOCUMENTS REFERRED TO IN THIS SUBSCRIPTION AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR INTERPRETATION OR ENFORCEMENT HEREOF OR ANY SUCH DOCUMENT THAT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS SUBSCRIPTION AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED BY SUCH A NEW YORK STATE OR FEDERAL COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 9(l) OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS SUBSCRIPTION AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS SUBSCRIPTION AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 9(m).
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n. The Issuer shall, by 9:00 a.m., New York City time, on the fourth (4th) business day immediately following the later of the date of this Subscription Agreement and the BCA, issue one or more press releases or file with the Commission a Current Report on Form 8-K (collectively, the “Disclosure Document”) disclosing all material terms of the transactions contemplated hereby, the Transaction, and any other material, nonpublic information that the Issuer has provided to Subscriber at any time prior to the filing of the Disclosure Document. From and after the issuance of the Disclosure Document, to the Issuer’s knowledge, Subscriber shall not be in possession of any material, nonpublic information received from the Issuer or any of its officers, directors or employees. Notwithstanding anything in this Subscription Agreement to the contrary, the Issuer shall not, and shall cause its representatives, including the Placement Agent and its representatives, not to publicly disclose the name of Subscriber or any of its affiliates, or include the name of Subscriber or any of its affiliates in any press release or marketing materials, or for any similar or related purpose, or in any filing with the Commission or any regulatory agency or trading market, without the prior written consent of Subscriber, except (i) as required by the federal securities law in connection with the Registration Statement, (ii) in a press release or marketing materials of the Issuer in connection with the Transaction to the extent any such disclosure is substantially equivalent to the information that has previously been made public without breach of the obligation under this Section 9(n) and (iii) to the extent such disclosure is required by law, at the request of the staff of the Commission or regulatory agency or under the regulations of NASDAQ, in which case the Issuer shall provide Subscriber with prior written notice of such disclosure permitted under this subclause (iii).
o. The parties agree that irreparable damage would occur if any provision of this Subscription Agreement were not performed in accordance with the terms hereof, and accordingly, that the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement or to enforce specifically the performance of the terms and provisions of this Subscription Agreement in an appropriate court of competent jurisdiction as set forth in Section 9(m), in addition to any other remedy to which any party is entitled at law or in equity.
p. The parties agree that Target is an express third party beneficiary of this Subscription Agreement and Target may directly enforce (including by an action for specific performance, injunctive relief or other equitable relief) each of the provisions of this Subscription Agreement, as amended, modified, supplemented or waived in accordance with this Subscription Agreement, as if it were a direct party hereto.
[Signature pages follow.]
17
IN WITNESS WHEREOF, each of the Issuer and Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.
| FUTURE HEALTH ESG CORP. | |||
| By: | /s/ Brad A. Bostic | ||
| Name: | Brad A. Bostic | ||
| Title: | Chief Executive Officer | ||
Signature Page to Subscription Agreement
SUBSCRIBER:
Variant Capital Limited
| By: | /s/ Qi Su | |
| Name: Qi Su | ||
| Title: President | ||
Email Address:
henryhuang@hakim.com.cn;
victorsu@hakiim.com.cn
Address:
Mill Mall, Suite 6, Wickhams Cay 1
P.O. Box 3085
Road Town, Tortola
British Virgin Islands
Attn: Henry Huang; Victor Su
Signature Page to Subscription Agreement
SCHEDULE A
ELIGIBILITY REPRESENTATIONS OF SUBSCRIBER
This Schedule must be completed by Subscriber and forms a part of the Subscription Agreement to which it is attached. Capitalized terms used and not otherwise defined in this Schedule have the meanings given to them in the Subscription Agreement. Subscriber must check the applicable box in either Part A or Part B below and the applicable box in Part C below.
A. (Please check the applicable subparagraphs):
1. ¨ We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) (a “QIB”) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as a QIB.
2. ¨ We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB.
*** OR ***
B. ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs):
1. x We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act or an entity in which all of the equity holders are accredited investors) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as an “accredited investor.”
2. x We are not a natural person.
*** AND ***
C. AFFILIATE STATUS (Please check the applicable box)
SUBSCRIBER:
¨ is:
x is not:
an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.
The Subscriber is a “qualified institutional buyer” (within the meaning of Rule 144A under the Securities Act) if it is an entity that meets any one of the following categories at the time of the sale of securities to the Subscriber (Please check the applicable subparagraphs):
¨ The Subscriber is an entity that, acting for its own account or the accounts of other qualified institutional buyers, in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the Subscriber and:
¨ is an insurance company as defined in section 2(a)(13) of the Securities Act;
¨ is an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or any business development company as defined in section 2(a)(48) of the Investment Company Act;
¨ is a Small Business Investment Company licensed by the US Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958, as amended (“Small Business Investment Act”);
¨ is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees;
¨ is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”);
¨ is a trust fund whose trustee is a bank or trust company and whose participants are exclusively (a) plans established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, or (b) employee benefit plan within the meaning of Title I of the ERISA, except, in each case, trust funds that include as participants individual retirement accounts or H.R. 10 plans;
¨ is a business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”);
¨ is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), corporation (other than a bank as defined in section 3(a)(2) of the Act, a savings and loan association or other institution referenced in section 3(a)(5)(A) of the Act, or a foreign bank or savings and loan association or equivalent institution), partnership, or Massachusetts or similar business trust;
¨ is an investment adviser registered under the Investment Advisers Act;
¨ is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with the Subscriber;
¨ is a dealer registered pursuant to Section 15 of the Exchange Act acting in a riskless principal transaction on behalf of a qualified institutional buyer;
¨ is an investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies1 which own in the aggregate at least $100 million in securities of issuers, other than issuers that are affiliated with Subscriber or are part of such family of investment companies;
¨ is an entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; or
¨ is a bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act, or any foreign bank or savings and loan association or equivalent institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the Subscriber and that has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale of securities in the case of a US bank or savings and loan association, and not more than 18 months preceding the date of sale of securities for a foreign bank or savings and loan association or equivalent institution.
Rule 501(a) under the Securities Act, in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Subscriber has indicated, by marking and initialing the appropriate box(es) below, the provision(s) below which apply to Subscriber and under which Subscriber accordingly qualifies as an “accredited investor.”
¨ Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;
¨ Any broker or dealer registered pursuant to section 15 of the Exchange Act;
¨ Any insurance company as defined in section 2(a)(13) of the Securities Act;
¨ Any investment company registered under the Investment Company Act or a business development company as defined in section 2(a) (48) of the Investment Company Act;
¨ Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act;
| 1 | “Family of investment companies” means any two or more investment companies registered under the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment adviser (or, in the case of unit investment trusts, the same depositor); provided, that (a) each series of a series company (as defined in Rule 1 8f-2 under the Investment Company Act) shall be deemed to be a separate investment company and (b) investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s adviser (or depositor). |
¨ Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;
¨ Any employee benefit plan within the meaning of Title I of the ERISA, if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”;
¨ Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act;
¨ Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal Revenue Code, in each case that was not formed for the specific purpose of acquiring the securities offered and that has total assets in excess of $5,000,000;
¨ Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;
¨ Any natural person whose individual net worth, or joint net worth with that person's spouse or spousal equivalent, exceeds $1,000,000 (excluding primary residence);
¨ Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse or spousal equivalent in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;
¨ Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in section 230.506(b)(2)(ii) of Regulation D under the Securities Act; or
x Any entity in which all of the equity owners are accredited investors.
SCHEDULE B
SCHEDULE OF TRANSFERS
Subscriber’s Subscription was in the amount of [●] Shares. The following transfers of a portion of the Subscription have been made:
| Date of Transfer or Reduction | Transferee | Number of Transferee Acquired Shares Transferred or Reduced |
Subscriber Revised Subscription Amount |
Schedule B as of ______________, 20__, accepted and agreed to as of this ____ day of ____________, 20__ by:
| FUTURE HEALTH ESG CORP. | ||
| By: | ||
| Name: | ||
| Title: | ||
| Signature of Subscriber: | ||
| [SUBSCRIBER] | ||
| By: | ||
| Name: | ||
| Title: | ||
Exhibit 10.2
FORWARD PURCHASE AGREEMENT
This Forward Purchase Agreement (this “Agreement”) is made as of this 13th day of June, 2022 by and between Future Health ESG Corp., a Delaware corporation (“Future Health” or the “Company”), and Hakim Holding Group Company Limited (“Buyer”).
WHEREAS, Future Health was organized for the purpose of acquiring one or more businesses, through a merger, capital stock exchange, asset acquisition or other similar business combination. Future Health has entered into a Business Combination Agreement and Plan of Reorganization (the “BCA”) with MacArthur Court Acquisition Corp. (“MCAC”) and Excelera DCE (the “Business Combination”) under which it will acquire 100% of the issued and outstanding stock of Excelera DCE (“Target”) from MCAC in a transaction intended to be a tax-free reorganization pursuant to Section 368(a)(1)(C) or (D) of the Internal Revenue Code of 1986, as amended, followed by a liquidation of MCAC;
WHEREAS, Future Health completed its initial public offering (“IPO”) of units (the “Public Units”) at a price of $10.00 per Public Unit, each comprised of one share of common stock, par value $0.0001 per share (the “Common Stock,” and the shares of Common Stock included in the Public Units, the “Public Shares”), and one-half of one redeemable warrant, where each whole redeemable warrant is exercisable to purchase one share of Common Stock at an exercise price of $11.50 per share;
WHEREAS, proceeds from the IPO and the sale of certain private placement securities in an aggregate amount equal to the gross proceeds from the IPO have been deposited into a trust account for the benefit of the holders of the Public Shares (the “Trust Account”), as described in the Registration Statement on Form S-1 (File. No. 333-258911);
WHEREAS, upon completion of the Business Combination, the holders of the Public Shares may redeem all or a portion of their Public Shares for a portion of the funds held in the Trust Account, as described in the Registration Statement;
WHEREAS, pursuant to certain subscription agreements entered into on the date hereof between the Company and the Buyer and certain other investors, the Buyer and the other investors agreed to purchase an aggregate of 9,090,909 shares of Common Stock (the “PIPE Shares”) in connection with the consummation of the Business Combination; and
WHEREAS, the parties wish to enter into this Agreement, pursuant to which, prior to or concurrently with the closing of the Business Combination, the Buyer and certain other investors shall invest an aggregate of $20,000,000 in connection with the Business Combination through open market purchases of shares of Common Stock on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
ARTICLE
I
Purchase Of Forward Purchase Shares
Section 1.01. Purchase and Sale.
(1) Buyer and its affiliates, at their discretion, shall purchase shares of Common Stock in open market purchases at an aggregate purchase price of $20,000,000 (the “Forward Purchase Shares”) following the execution of the BCA and prior to the date which is two (2) business days prior to the date of Future Health’s stockholder meeting to approve the Business Combination (the “Purchase Deadline”). In no event shall Buyer be required to purchase Forward Purchase Shares at a price in excess of $11.00 per share. In the event Buyer purchases less than $20,000,000 of Forward Purchase Shares by the Purchase Deadline, the Buyer shall purchase from the Company, at the Company’s request, a number of shares of Common Stock (the “Additional Shares”) immediately prior to the Business Combination in an amount equal to a fraction, (i) the numerator of which is equal to (a)$20,000,000 less (b) the aggregate dollar amount paid for the Forward Purchase Shares and (ii) the denominator of which is $11.00. The Buyer shall notify Future Health in writing (the “Buyer Notice”) of each purchase of Common Stock in the open market as promptly as practicable following such purchase, and in any event no later than the business day following the date of such purchase. The Buyer shall attach copies of broker confirmations or other documentation of open market purchases of the Common Stock to the Buyer Notice for such transaction. For purposes of this Agreement, “business day” means any day on which the principal offices of the Securities and Exchange Commission in Washington, D.C. are open to accept filings.
(2) Future Health shall provide written notice to Buyer (the “Future Health Notice”) to fund the purchase of the Additional Shares following the Purchase Deadline. Buyer shall deliver to Future Health the purchase price for the Additional Shares by wire transfer of U.S. dollars immediately available funds to an interest-bearing escrow account (the “Escrow Account”) specified by Future Health and established for such purposes in the Future Health Notice within two (2) business days of receipt of the Future Health Notice, pursuant to an escrow agreement acceptable to Future Health. The closing of the purchase of Additional Shares hereunder, if any, shall occur on the date of, and at a time immediately prior to, the closing of the Business Combination (such date, the “Closing Date”). Not less than two (2) business days prior to the Closing Date, the Issuer shall provide written notice (the “Closing Notice”) to Buyer and Continental Stock Transfer & Trust Company, as escrow agent, or another entity acceptable to Future Health, acting as escrow agent (the “Escrow Agent”) of the Closing Date. The Escrow Agent shall deliver to the Company on the Closing Date (unless otherwise agreed by the Company) the purchase price for the Additional Shares by wire transfer of U.S. dollars in immediately available funds to the account specified by the Company in the Closing Notice. On the Closing Date, the Company shall (A) establish at the Company’s transfer agent in book entry form on behalf of Buyer the Additional Shares, free and clear of any liens or other restrictions whatsoever (other than those arising under state or federal securities laws), in the name of Buyer (or its nominee in accordance with its delivery instructions) or to a custodian designated by Buyer, as applicable, and (B) deliver evidence of such issuance of the Additional Shares to Buyer from the transfer agent.
Section 1.02. Forward Purchase Shares and Additional Shares Lock-Up. The Forward Purchase Shares and Additional Shares will be subject to lock-up restrictions pursuant to a lock-up agreement, dated as of the date hereof, by and among the Company, the Buyer and the other parties thereto, the form of which is attached as an exhibit to the BCA.
Section 1.03. Non-Redemption. Buyer and its affiliates agree not to request redemption of any shares of Common Stock, including the Forward Purchase Shares and any Additional Shares, in conjunction with Future Health’s stockholders’ vote to approve (i) the Business Combination or (ii) any extension of the date by which Future Health has to complete a business combination.
Each register and book entry for the Additional Shares purchased by the Buyer hereunder shall contain a notation, and each certificate (if any) evidencing the Additional Shares shall be stamped or otherwise imprinted with a legend, in substantially the following form:
2
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT AND LAWS.”
ARTICLE
II
Representations And Warranties Of Future Health
Future Health hereby represents and warrants to Buyer on the date hereof and as of the closing of the Business Combination that:
Section 2.01. Incorporation and Corporate Power. Future Health is a corporation, duly incorporated, validly existing and in good standing in the jurisdiction of its incorporation. Future Health has the requisite corporate power and authority to execute, deliver and carry out the terms of this Agreement and to consummate the transactions contemplated hereby and thereby.
Section 2.02. Authority; Non-Contravention. This Agreement has been validly authorized, executed and delivered by Future Health and assuming the due authorization, execution and delivery thereof by the Buyer, is a valid and binding agreement enforceable against it in accordance with its terms, (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, or (iii) except to the extent the indemnification provisions contained in the Registration Rights may be limited by applicable federal or state securities laws.
Section 2.03. Capitalization. As of the date of this Agreement, the authorized share capital of Future Health consists of:
(1) 500,000,000 shares of Common Stock, of which 25,000,000 shares are issued and outstanding, excluding the PIPE Shares.
(2) 5,000,000 shares of Preferred Stock, none of which are issued and outstanding.
Section 2.04. Exchange Listing. Future Health will use commercially reasonable efforts to effect the listing of the Additional Shares, if any, on a national securities exchange.
Section 2.05. Valid Issuance of Forward Purchase Shares. The Additional Shares, if and when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement and registered with the Issuer’s transfer agent, will be validly issued, fully paid and nonassessable and free of all preemptive or similar rights, liens, encumbrances and charges with respect to the issue thereof and restrictions on transfer other than restrictions on transfer specified under this Agreement, applicable state and federal securities laws and liens or encumbrances created by or imposed by the Buyer. Assuming the accuracy of the representations of the Buyer in this Agreement and subject to the filings described in Section 2.06 below, the Additional Shares will be issued in compliance with all applicable federal and state securities laws.
Section 2.06. Governmental Consents and Filings. Assuming the accuracy of the representations and warranties made by the Buyer in this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of Future Health in connection with the consummation of the transactions contemplated by this Agreement, except for any filings pursuant to Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), applicable state securities laws, and pursuant to the Registration Rights (defined below).
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Section 2.07. Operations. As of the date hereof, Future Health has not conducted any operations other than organizational activities, activities in connection with offerings of its securities and searching for and reviewing opportunities for a business combination and entering into the BCA.
Section 2.08. Compliance with Other Instruments. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement by Future Health will not result in any violation or default (i) of any provisions of Future Health’s certificate of incorporation or by-laws, as they may be amended from time to time (the “Charter”) or its other governing documents, (ii) of any instrument, judgment, order, writ or decree to which Future Health is a party or by which Future Health is bound, (iii) under any note, indenture or mortgage to which Future Health is a party or by which Future Health is bound, (iv) under any lease, agreement, contract or purchase order to which Future Health is a party or by which Future Health is bound or (v) of any provision of federal or state statute, rule or regulation applicable to Future Health, in each case (other than clause (i)) which would have a material adverse effect on Future Health or its ability to consummate the transactions contemplated by this Agreement.
Section 2.09. Compliance with Anti-Money Laundering Laws. The operations of Future Health are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the USA PATRIOT Act of 2001 and the applicable money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving Future Health with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of Future Health, threatened.
Section 2.10. Absence of Litigation. Except as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, properties, financial condition, stockholders’ equity or results of operations of Future Health, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of Future Health, threatened against or affecting Future Health or any of Future Health’s officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such.
Section 2.11. No General Solicitation. Neither Future Health, nor any of its officers, directors, employees, agents or shareholders has either directly or indirectly, including, through a broker or finder (i) engaged in any general solicitation, or (ii) published any advertisement in connection with the offer and sale of the Additional Shares, if any.
Section 2.12. SEC Filings. To the knowledge of Future Health, none of Future Health’s reports and other filings with the Securities and Exchange Commission, as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
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ARTICLE III
Representations and Warranties of the Buyer
Buyer hereby represents and warrants to Future Health on the date hereof and as of the closing of the Business Combination that:
Section 3.01. Organization. Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Buyer has the requisite power and authority to execute, deliver and carry out the terms of this Agreement and to consummate the transactions contemplated hereby and thereby.
Section 3.02. Authority; Non-Contravention. This Agreement has been validly authorized, executed and delivered by Buyer and assuming the due authorization, execution and delivery thereof by Future Health, is a valid and binding agreement enforceable against it in accordance with its terms, (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, or (iii) except to the extent the indemnification provisions contained in the Registration Rights may be limited by applicable federal or state securities laws.
Section 3.03. Governmental Approvals. All consents, approvals, orders, authorizations, registrations, qualifications, designations, declarations or filings with any governmental or other authority on the part of Buyer required in connection with the consummation of the transactions contemplated in the Agreement have been obtained and are effective. No consent, approval, order, authorization, registration, qualification, designation, declaration or filing with any governmental or other authority is needed with respect to the transfer of funds from the account where they are currently held to the Escrow Account.
Section 3.04. Sophisticated Buyer. Buyer (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act), in each case, satisfying the applicable requirements set forth on Schedule A, (ii) is acquiring the Additional Shares only for its own account and not for the account of others, or if Buyer is subscribing for the Additional Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” (as defined above) and Buyer has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account and (iii) is not acquiring the Additional Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or any other securities laws of the United States or any other jurisdiction. Buyer has completed Schedule A following the signature page hereto and the information contained therein is accurate and complete. Buyer is not an entity formed for the specific purpose of acquiring the Additional Shares.
Section 3.05. No Brokers. No broker, investment banker, financial advisor, finder or other Person (defined below) has been retained by or is authorized to act on behalf of Buyer that will be entitled to any fee or commission for which Future Health will be liable in connection with the execution of this Agreement or the consummation of the transactions contemplated hereby. For purposes of this Agreement, “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or government or any department or agency thereof.
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Section 3.06. Restricted Securities. Buyer understands that the Additional Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Additional Shares have not been registered under the Securities Act. Buyer understands that the Additional Shares may not be resold, Transferred, pledged or otherwise disposed of by Buyer absent an effective registration statement under the Securities Act, except (i) to the Company or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (iii) pursuant to Rule 144 under the Securities Act, provided that all of the applicable conditions thereof have been met or (iv) pursuant to another applicable exemption from the registration requirements of the Securities Act (including without limitation, a private resale pursuant to so-called Section 4(a)(1-½)), and that any certificates or book-entry records representing the Additional Shares shall contain a legend to such effect. Buyer acknowledges that the Additional Shares will not be eligible for resale pursuant to Rule 144A promulgated under the Securities Act. Buyer understands and agrees that the Additional Shares will be subject to transfer restrictions and, as a result of these transfer restrictions, Buyer may not be able to readily resell the Additional Shares and may be required to bear the financial risk of an investment in the Additional Shares for an indefinite period of time. Buyer understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or Transfer of any of the Additional Shares. For purposes of this Agreement “Transfer” shall mean any direct or indirect transfer, redemption, disposition or monetization in any manner whatsoever, including, without limitation, through any derivative transactions.
Section 3.07. Adequacy of Financing. The Buyer has sufficient funds to satisfy its obligations under this Agreement.
Section 3.08. Compliance with Other Instruments. The execution, delivery and performance by the Buyer of this Agreement, including the purchase of the Additional Shares and the consummation by the Buyer of the transactions contemplated by this Agreement will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Buyer pursuant to the terms (i) of any provisions of its organizational documents, if applicable, (ii) of any instrument, judgment, order, writ or decree to which it is a party or by which it is bound, (iii) under any note, indenture or mortgage to which it is a party or by which it is bound, (iv) under any lease, agreement, contract or purchase order to which it is a party or by which it is bound or (v) of any provision of federal or state statute, rule or regulation applicable to the Buyer, in each case (other than clause (i)), which would have a material adverse effect on the Buyer or its ability to consummate the transactions contemplated by this Agreement.
Section 3.09. No Public Market. The Buyer understands that no public market now exists for the Additional Shares, and that Future Health has made no assurances that a public market will ever exist for the Additional Shares.
Section 3.10. Accredited Investor. The Buyer is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
Section 3.11. Affiliation of Certain FINRA Members. The Buyer is neither a Person associated nor affiliated with any underwriter of the IPO or, to its actual knowledge, any other member of the Financial Industry Regulatory Authority that is participating in the IPO.
Section 3.12. Disclosure of Information. The Buyer has reviewed the BCA and has had an opportunity to discuss Future Health’s and Target’s business, management, financial affairs and the terms and conditions of this Agreement and the offering and sale of the Additional Shares, as well as the terms of the BCA, with Future Health’s management.
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Section 3.13. No Other Representations and Warranties; Non-Reliance. Except for the specific representations and warranties contained in this Section 3 and in any certificate or agreement delivered pursuant hereto, none of the Buyer nor any Person acting on behalf of the Buyer nor any of the Buyer’s affiliates (the “Buyer Parties”) has made, makes or shall be deemed to make any other express or implied representation or warranty with respect to the Buyer and this offering, and the Buyer Parties disclaim any such representation or warranty. Except for the specific representations and warranties expressly made by Future Health in Section 2 of this Agreement and in any certificate or agreement delivered pursuant hereto, the Buyer Parties specifically disclaim that they are relying upon any other representations or warranties that may have been made by Future Health.
ARTICLE
IV
Acknowledgement; Waiver
Section 4.01. Acknowledgement; Waiver. Buyer (i) acknowledges that Future Health may possess or have access to material non-public information which has not been and will not be communicated to Buyer; (ii) hereby waives any and all claims, whether at law, in equity or otherwise, that he, she, or it may now have or may hereafter acquire, whether presently known or unknown, against Future Health or any of its officers, directors, employees, agents, affiliates, subsidiaries, successors or assigns relating to any failure to disclose any non-public information in connection with the transactions contemplated by this Agreement, including without limitation, any such claims arising under the securities or other laws, rules and regulations, and (iii) is aware that Future Health is relying on the foregoing acknowledgement and waiver in clauses (i) and (ii) above, respectively, in connection with the transactions contemplated by this Agreement. No waiver by any party hereto of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, may be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising because of any prior or subsequent occurrence.
Section 4.02. Registration Rights. The Buyer will be granted registration rights by Future Health with respect to the Additional Shares, if any (“Registration Rights”), pursuant to an amended and restated registration rights agreement to be entered into with Future Health, in a form attached to the BCA.
Section 4.03. Transfer. This Agreement and all of the Buyer’s rights and obligations hereunder (including the Buyer’s obligation to purchase the Forward Purchase Shares and Additional Shares) may be transferred or assigned, at any time and from time to time, in whole or in part, to one or more affiliates of the Buyer (each such transferee, a “Transferee”) but not to other third parties. Upon any such assignment, the applicable Transferee shall execute a signature page to this Agreement, substantially in the form of the Buyer’s signature page hereto (the “Joinder Agreement”), which shall reflect the maximum number of Forward Purchase Shares and/or Additional Shares to be purchased by such Transferee (the “Transferee Securities”), and, upon such execution, such Transferee shall have all the same rights and obligations of the Buyer hereunder with respect to the Transferee Securities, and references herein to the “Buyer” shall be deemed to refer to and include any such Transferee with respect to such Transferee and to its Transferee Securities; provided, that any representations, warranties, covenants and agreements of the Buyer and any such Transferee shall be several and not joint and shall be made as to the Buyer or any such Transferee, as applicable, as to itself only.
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ARTICLE V
Miscellaneous
Section 5.01. Termination. This Agreement shall terminate on the earlier of (i) the closing of the Business Combination and (ii) the later of (a) December 14, 2022 and (b) if Future Health’s stockholders approve an extension of the date by which Future Health must consummate a business combination, such later date as approved by Future Health’s stockholders.
Section 5.02. Counterparts; Facsimile. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. This Agreement or any counterpart may be executed via facsimile transmission, and any such executed facsimile copy shall be treated as an original.
Section 5.03. Governing Law. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, THE SUPREME COURT OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF NEW YORK SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS FORWARD PURCHASE AGREEMENT AND THE DOCUMENTS REFERRED TO IN THIS FORWARD PURCHASE AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR INTERPRETATION OR ENFORCEMENT HEREOF OR ANY SUCH DOCUMENT THAT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS FORWARD PURCHASE AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED BY SUCH A NEW YORK STATE OR FEDERAL COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 5.12 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
Section 5.04. WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS FORWARD PURCHASE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS FORWARD PURCHASE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS FORWARD PURCHASE AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS FORWARD PURCHASE AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 5.04.
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Section 5.05. Remedies Cumulative. Each of the parties hereto acknowledges and agrees that, in the event of any breach of any covenant or agreement contained in this Agreement by the other party, money damages may be inadequate with respect to any such breach and the non- breaching party may have no adequate remedy at law. It is accordingly agreed that each of the parties hereto shall be entitled, in addition to any other remedy to which they may be entitled at law or in equity, to seek injunctive relief and/or to compel specific performance to prevent breaches by the other party hereto of any covenant or agreement of such other party contained in this Agreement. Accordingly, Buyer hereby agrees that Future Health is entitled to an injunction prohibiting any conduct by the Buyer in violation of this Agreement and the Buyer shall not seek the posting of any bond in connection with such request for an injunction. Furthermore, in any action by Future Health to enforce this Agreement, Buyer waives its right to assert any counterclaims and its right to assert set-off as a defense. The prevailing party agrees to pay all costs and expenses, including reasonable attorneys' and experts' fees that such prevailing party may incur in connection with the enforcement of this Agreement.
Section 5.06. Severability. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof; provided that if any provision of this Agreement, as applied to any party hereto or to any circumstance, is adjudged by a governmental authority, arbitrator, or mediator not to be enforceable in accordance with its terms, the parties hereto agree that the governmental authority, arbitrator, or mediator making such determination will have the power to modify the provision in a manner consistent with its objectives such that it is enforceable, and/or to delete specific words or phrases, and in its reduced form, such provision will then be enforceable and will be enforced.
Section 5.07. Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns.
Section 5.08. Headings. The descriptive headings of the Sections hereof are inserted for convenience only, do not constitute a part of this Agreement and will not affect in any way the meaning or interpretation of this Agreement.
Section 5.09. Entire Agreement; Changes in Writing. This Agreement constitutes the entire agreement among the parties hereto and supersedes and cancels any prior agreements, representations and warranties, whether oral or written, among the parties hereto relating to the transaction contemplated hereby. Neither this Agreement nor any provision hereof may be changed or amended orally, but only by an agreement in writing signed by the other party hereto.
Section 5.10. Trust Account Waiver. Buyer acknowledges that, as described in Future Health’s prospectus relating to its initial public offering dated September 9, 2021 (the “Prospectus”), available at www.sec.gov, substantially all of the Company’s assets consist of the cash proceeds of Future Health’s initial public offering and private placements of its securities, and substantially all of those proceeds have been deposited the Trust Account for the benefit of Future Health, its public stockholders and the underwriters of the IPO. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay for taxes, the cash in the Trust Account may be disbursed only for the purposes set forth in the Prospectus. For and in consideration of Future Health entering into this Agreement, the receipt and sufficiency of which are hereby acknowledged, Buyer, on behalf of itself and its affiliates and representatives, agrees that it does not have any right, title or interest, or any claim of any kind in the monies held in the Trust Account (each, a “Claim”) and hereby waives any Claim they have or may have in the future arising out of this Agreement or otherwise, in or to any monies held in the Trust Account, and agrees not to seek recourse against the Trust Account as a result of, or arising out of, this Agreement or otherwise; provided, however, that nothing in this Section 5.10 shall be deemed to limit Buyer’s (i) right, title, interest or claim to the Trust Account by virtue of Buyer’s record or beneficial ownership of securities of Future Heath acquired by any means other than pursuant to this Agreement, including but not limited to any redemption right with respect to any such securities of Future Health and (ii) rights to redemption rights with respect to the Forward Purchase Shares upon the dissolution of Future Health or Future Health consummating a business combination other than the Business Combination.
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Section 5.11. Further Assurances. If at any time any of the parties hereto shall consider or be advised that any further documents or actions are necessary or desirable to vest, perfect or confirm of record or otherwise the rights, title or interest in or to the Shares or under or otherwise pursuant to this Agreement, the parties hereto shall execute and deliver such further documents or take such actions and provide all assurances and to take and do all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in or to the Shares or under or otherwise pursuant to this Agreement.
Section 5.12. Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt, and (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile (if any) during normal business hours of the recipient, and if not sent during normal business hours, then on the next business day, (c) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications sent to Future Health shall be sent to: 8 The Green, Suite #12081, Dover, Delaware 19901, Attn: Travis Morgan, Chief Financial Officer, with a copy to Future Health’s counsel at: McDermott Will & Emery LLP, One Vanderbilt Avenue, New York, NY 10017, Attn: Ari Edelman, e-mail: aedelman@mwe.com.
All communications to Buyer shall be sent to: Hakim Holding Group Company Limited, Flat/Room 3201, Lippo Centre, 89 Queensway, Admiralty, Hong Kong, Attn: Henry Huang, email: henryhuang@hakim.com.cn, or to such e-mail address or address as subsequently modified by written notice given in accordance with this Section 5.12.
Section 5.13. No Finder’s Fees. Each of the parties represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. The Buyer agrees to indemnify and to hold harmless Future Health from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Buyer or its respective officers, employees or representatives is responsible. Future Health agrees to indemnify and hold harmless the Buyer from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which Future Health or any of its officers, employees or representatives is responsible.
Section 5.14. Survival of Representations and Warranties. All of the representations and warranties contained herein shall survive the Closing.
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Section 5.15. Successors. All of the terms, agreements, covenants, representations, warranties, and conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by, the parties hereto and their respective successors. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
Section 5.16. Expenses. Each of Future Health and the Buyer will bear its own costs and expenses incurred in connection with the preparation, execution and performance of this Agreement and the consummation of the transactions contemplated hereby, including all fees and expenses of agents, representatives, financial advisors, legal counsel and accountants.
Section 5.17. Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will arise favoring or disfavoring any party hereto because of the authorship of any provision of this Agreement. Any reference to any federal, state, local, or foreign law will be deemed also to refer to law as amended and all rules and regulations promulgated thereunder, unless the context requires otherwise. The words “include,” “includes,” and “including” will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will not detract from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant.
Section 5.18. Amendments. This Agreement may not be amended, modified or waived as to any particular provision, except with the written consent of Future Health and the Buyer.
Section 5.19. Confidentiality. Except as may be required by law, regulation or applicable stock exchange listing requirements, unless and until the transactions contemplated hereby and the terms hereof are publicly announced or otherwise publicly disclosed by Future Health, the parties hereto shall keep confidential and shall not publicly disclose the existence or terms of this Agreement.
Section 5.20. Third Party Beneficiary. The parties agree that Target is an express third party beneficiary of this Agreement and Target may directly enforce (including by an action for specific performance, injunctive relief or other equitable relief) each of the provisions of this Agreement, as amended, modified, supplemented or waived in accordance with this Agreement, as if it were a direct party hereto.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth on the first page of this Agreement.
| FUTURE HEALTH ESG CORP. | ||
| By: | /s/ Brad A. Bostic | |
| Name: Brad A. Bostic | ||
| Title: Chief Executive Officer | ||
| BUYER: | ||
| Hakim Holding Group Company Limited | ||
| By: | /s/ Qi Cheng Wang | |
| Name: Qi Cheng Wang | ||
| Title: Director | ||
[Signature page to Forward Purchase Agreement]
SCHEDULE A
ELIGIBILITY REPRESENTATIONS OF BUYER
This Schedule must be completed by Buyer and forms a part of the Forward Purchase Agreement to which it is attached. Capitalized terms used and not otherwise defined in this Schedule have the meanings given to them in the Forward Purchase Agreement. Buyer must check the applicable box in either Part A or Part B below and the applicable box in Part C below.
A. (Please check the applicable subparagraphs):
1. ¨ We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) (a “QIB”) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as a QIB.
2. ¨ We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB.
*** OR ***
B. ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs):
1. x We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act or an entity in which all of the equity holders are accredited investors) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as an “accredited investor.”
2. x We are not a natural person.
*** AND ***
C. AFFILIATE STATUS (Please check the applicable box)
BUYER:
¨ is:
x is not:
an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.
The Buyer is a “qualified institutional buyer” (within the meaning of Rule 144A under the Securities Act) if it is an entity that meets any one of the following categories at the time of the sale of securities to the Buyer (Please check the applicable subparagraphs):
x The Buyer is an entity that, acting for its own account or the accounts of other qualified institutional buyers, in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the Buyer and:
¨ is an insurance company as defined in section 2(a)(13) of the Securities Act;
[Signature page to Forward Purchase Agreement]
¨ is an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or any business development company as defined in section 2(a)(48) of the Investment Company Act;
¨ is a Small Business Investment Company licensed by the US Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958, as amended (“Small Business Investment Act”);
¨ is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees;
¨ is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”);
¨ is a trust fund whose trustee is a bank or trust company and whose participants are exclusively (a) plans established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, or (b) employee benefit plan within the meaning of Title I of the ERISA, except, in each case, trust funds that include as participants individual retirement accounts or H.R. 10 plans;
¨ is a business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”);
¨ is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), corporation (other than a bank as defined in section 3(a)(2) of the Act, a savings and loan association or other institution referenced in section 3(a)(5)(A) of the Act, or a foreign bank or savings and loan association or equivalent institution), partnership, or Massachusetts or similar business trust;
¨ is an investment adviser registered under the Investment Advisers Act;
¨ is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with the Buyer;
¨ is a dealer registered pursuant to Section 15 of the Exchange Act acting in a riskless principal transaction on behalf of a qualified institutional buyer;
¨ is an investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies1 which own in the aggregate at least $100 million in securities of issuers, other than issuers that are affiliated with Buyer or are part of such family of investment companies;
x is an entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; or
¨ is a bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act, or any foreign bank or savings and loan association or equivalent institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the Buyer and that has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale of securities in the case of a US bank or savings and loan association, and not more than 18 months preceding the date of sale of securities for a foreign bank or savings and loan association or equivalent institution.
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Rule 501(a) under the Securities Act, in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Buyer has indicated, by marking and initialing the appropriate box(es) below, the provision(s) below which apply to Buyer and under which Buyer accordingly qualifies as an “accredited investor.”
¨ Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;
¨ Any broker or dealer registered pursuant to section 15 of the Exchange Act;
¨ Any insurance company as defined in section 2(a)(13) of the Securities Act;
¨ Any investment company registered under the Investment Company Act or a business development company as defined in section 2(a) (48) of the Investment Company Act;
¨ Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act;
| 1 | “Family of investment companies” means any two or more investment companies registered under the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment adviser (or, in the case of unit investment trusts, the same depositor); provided, that (a) each series of a series company (as defined in Rule 1 8f-2 under the Investment Company Act) shall be deemed to be a separate investment company and (b) investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s adviser (or depositor). |
¨ Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;
¨ Any employee benefit plan within the meaning of Title I of the ERISA, if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”;
¨ Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act;
¨ Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal Revenue Code, in each case that was not formed for the specific purpose of acquiring the securities offered and that has total assets in excess of $5,000,000;
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¨ Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;
¨ Any natural person whose individual net worth, or joint net worth with that person's spouse or spousal equivalent, exceeds $1,000,000 (excluding primary residence);
¨ Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse or spousal equivalent in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;
¨ Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in section 230.506(b)(2)(ii) of Regulation D under the Securities Act; or
x Any entity in which all of the equity owners are accredited investors.
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Exhibit 10.3
LOCK-UP AGREEMENT
This Lock-up Agreement (this “Agreement”) is made and entered into as of June 13, 2022, by and among (i) Future Health ESG Corp., a Delaware corporation (the “Company”), and (ii) each of the parties listed on SCHEDULE 1 attached hereto (the “Lock-up Equity Holders”). The Lock-up Equity Holders and any person or entity who hereafter enters into a joinder to this Agreement substantially in the form of EXHIBIT A hereto are referred to herein, individually, as a “Securityholder” and, collectively, as the “Securityholders.”
Capitalized terms used but not defined herein have the meanings ascribed in the Business Combination Agreement and Plan of Reorganization (the “BCA”) dated as of the date hereof, entered into by and among the Company, MacArthur Court Acquisition Corp., a California corporation (the “MCAC”), and Excelera DCE (“Excelera”), a California corporation, pursuant to which the Company will purchase from MCAC, and MCAC will sell to the Company, 100% of the issued and outstanding shares of Excelera in exchange for shares of common stock of the Company, which will be re-named Excelera Health, Inc. (the “Business Combination”).
WHEREAS, pursuant to the BCA, and in view of the valuable consideration to be received by the parties thereunder, the parties desire to enter into this Agreement, pursuant to which the Lock-up Shares (as defined below) shall become subject to limitations on disposition as set forth herein.
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Subject to the exceptions set forth herein, each Securityholder agrees not to (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option, right or warrant to purchase or otherwise transfer, dispose of or agree to transfer or dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Securities and Exchange Commission promulgated thereunder, any shares of the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”) held by it or issued or issuable to the Securityholders in connection with the Business Combination (including (A) Common Stock acquired in connection with the Business Combination, (B) Common Stock acquired through open market purchases as Forward Purchase Shares (as defined in the Forward Purchase Agreements) or from the Company as additional shares pursuant to certain Forward Purchase Agreements between the Company and certain investors, (C) Common Stock acquired as part of the Private Placements or issued in exchange for, or on conversion or exercise of, any securities issued as part of the Private Placements), any shares of Common Stock issuable upon the exercise of options or warrants to purchase shares of Common Stock held by it, or any securities convertible into or exercisable or exchangeable for Common Stock held by it (the “Lock-up Shares”), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Lock-up Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii) (the actions specified in clauses (i)-(iii), collectively, “Transfer”) during the period beginning on the Closing Date and ending on the date described in paragraph 3 (the “Lock-up Period”).
2. The restrictions set forth in paragraph 1 shall not apply to:
(i) in the case of an entity, a Transfer (A) to another entity that is an affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned, or to any investment fund or other entity controlling, controlled by, managing or managed by or under common control with the undersigned or affiliates of the undersigned or who shares a common investment advisor with the undersigned or (B) as part of a distribution to members, partners or shareholders of the undersigned;
(ii) in the case of an individual, Transfers by bona fide gift to members of the individual’s immediate family (as defined below) or to a trust, the beneficiary of which is a holder or a member of one of the individual’s immediate family, an affiliate of such person or to a charitable organization;
(iii) in the case of an individual, Transfers by virtue of the laws of descent and distribution upon death of the individual;
(iv) in the case of an individual, Transfers by operation of law or pursuant to a qualified domestic relations order;
(v) in the case of an individual, Transfers to a partnership, limited liability company or other entity of which the undersigned and/or the immediate family (as defined below) of the undersigned are the legal and beneficial owner of all of the outstanding equity securities or similar interests;
(vi) in the case of an entity that is a trust, Transfers to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust;
(vii) in the case of an entity, Transfers by virtue of the laws of the state of the entity’s organization and the entity’s organizational documents upon dissolution of the entity;
(viii) Transfers relating to Common Stock or other securities convertible into or exercisable or exchangeable for Common Stock acquired in open market transactions after the Closing, provided that no such transaction is required to be, or is, publicly announced (whether on Form 4, Form 5 or otherwise, other than a required filing on Schedule 13F, 13G or 13G/A) during the Lock-up Period;
(ix) the exercise of stock options or warrants to purchase shares of Common Stock or the vesting of stock awards of Common Stock and any related transfer of shares of Common Stock to the Company in connection therewith (x) deemed to occur upon the “cashless” or “net” exercise of such options or warrants or (y) for the purpose of paying the exercise price of such options or warrants or for paying taxes due as a result of the exercise of such options or warrants, the vesting of such options, warrants or stock awards, or as a result of the vesting of such shares of Common Stock, it being understood that all shares of Common Stock received upon such exercise, vesting or transfer will remain subject to the restrictions of this Agreement during the Lock-up Period;
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(x) Transfers to the Company pursuant to any contractual arrangement in effect at the Closing of the Business Combination that provides for the repurchase by the Company or forfeiture of Common Stock or other securities convertible into or exercisable or exchangeable for Common Stock in connection with the termination of the Securityholder’s service to the Company;
(xi) the entry, by the Securityholder, at any time after the Closing of the Business Combination, of any trading plan providing for the sale of shares of Common Stock by the Securityholder, which trading plan meets the requirements of Rule 10b5-1(c) under the Exchange Act, provided, however, that such plan does not provide for, or permit, the sale of any shares of Common Stock during the Lock-up Period, no Transfers under such trading plan are effected prior to the expiration of the Lock-Up Period and no public announcement or filing is voluntarily made or required regarding such plan during the Lock-up Period;
(xii) Transfers in the event of completion of a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s securityholders having the right to exchange their shares of Common Stock for cash, securities or other property; and
(xiii) Upon ten days prior written notice to the Company, Transfers by MCAC or a shareholder or former shareholder of MCAC (but not a Transfer to Future Health or an affiliate thereof) of up to twenty percent (20%) of the shares of Common Stock received by MCAC or such Securityholder to satisfy any U.S. federal, state, or local income tax obligations of MCAC or such Securityholder (or its direct or indirect owners) arising from the Reorganization, including under the U.S. Internal Revenue Code of 1986, as amended (the “Code”), or the U.S. Treasury Regulations promulgated thereunder (the “Regulations”), solely and to the extent necessary to cover any tax liability as a direct result of the Reorganization; provided, that no such Transfer may be made by MCAC or a shareholder or former shareholder of MCAC to the extent that such Transfer, when taken together with Transfers made by MCAC or other shareholders or former shareholders of MCAC pursuant to this clause (xiii), would likely result in the Reorganization no longer qualifying as a “reorganization” under Section 368 of the Code. .
provided, however, that (A) in the case of clauses (i) through (vii), these permitted transferees must enter into a written agreement, in substantially the form of this Agreement (it being understood that any references to “immediate family” in the agreement executed by such transferee shall expressly refer only to the immediate family of the Securityholder and not to the immediate family of the transferee), agreeing to be bound by these Transfer restrictions. For purposes of this paragraph, “immediate family” shall mean a spouse, domestic partner, child (including by adoption), father, mother, brother or sister of the undersigned, and lineal descendant (including by adoption) of the undersigned or of any of the foregoing persons; and “affiliate” shall have the meaning set forth in Rule 405 under the Securities Act of 1933, as amended.
3. The Lock-up Period shall terminate upon the earlier of (A) one year after the Closing, (B) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transactions that results in all of the Company’s stockholders having the right to exchange their shares of cash, securities or other property, and (C) with respect to 1/3 of the Lock-up Shares in each instance, the dates subsequent to the Closing on which the price of the Company’s Common Stock equals or exceeds a target price of $12.00, $13.00 and $14.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and other similar transactions) for a period of 20 trading days within any consecutive 30 trading day period. Multiple target prices may be met simultaneously. In no event shall any Securityholder Transfer within any continuous 90-day period more than 1/3 of the Lock-up Shares originally issued to such Securityholder. Notwithstanding the foregoing, the Lock-up Period for the Private Placement Warrants or the underlying shares shall terminate 30 days after the Closing. “Private Placement Warrants” mean the 6,375,000 warrants of the Company that certain initial stockholders purchased in a private placement that occurred substantially concurrently with the consummation of the Company’s initial public offering.
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4. For the avoidance of doubt, each Securityholder shall retain all of its rights as a stockholder of the Company with respect to the Lock-up Shares during the Lock-up Period, including the right to vote any Lock-up Shares that are entitled to vote.
5. In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described therein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Agreement, and such purported Transfer shall be null and void ab initio. In addition, during the Lock-up Period, each certificate or book-entry position evidencing the Lock-up Shares shall be marked with a legend in substantially the following form, in addition to any other applicable legends:
“THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A LOCK-UP AGREEMENT BY AND AMONG THE COMPANY AND THE REGISTERED HOLDER OF THE SECURITIES (OR THE PREDECESSOR IN INTEREST TO THE SECURITIES). A COPY OF SUCH LOCK-UP AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”
6. Each Securityholder hereby represents and warrants to the Company as follows:
(i) Such Securityholder has all necessary power and authority to execute and deliver this Agreement and to perform such Securityholder’s obligations hereunder. The execution and delivery of this Agreement by such Securityholder has been duly and validly authorized and no other action on the part of such Securityholder is necessary to authorize this Agreement. This Agreement has been duly and validly executed and delivered by such Securityholder and, assuming the due authorization, execution and delivery by the other Securityholders and Company, constitutes a legal, valid and binding obligation of such Securityholder, enforceable against such Securityholder in accordance with its terms, subject to the Remedies Exceptions.
(ii) The execution and delivery of this Agreement by such Securityholder does not, and the performance of this Agreement by such Securityholder will not: (i) conflict with or violate any applicable law applicable to such Securityholder, (ii) contravene or conflict with, or result in any violation or breach of, any provision of any charter, articles of association, operating agreement or similar formation or governing documents and instruments of such Securityholder, or (iii) result in any breach of or constitute a material default (or an event which, with notice or lapse of time or both, would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any of the Lock-up Shares that is held by such Securityholder pursuant to any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument (whether written or oral) to which such Securityholder is a party or by which such Securityholder is bound, except, in the case of clause or (iii), for any such conflicts, violations, breaches, defaults or other occurrences which, individually or in the aggregate, would not reasonably be expected to materially impair the ability of such Securityholder to perform such Securityholder’s obligations hereunder.
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(iii) The execution and delivery of this Agreement by such Securityholder does not, and the performance of this Agreement by such Securityholder will not, require any consent, approval, authorization or permit of, or filing with or notification to, or expiration or termination of any waiting period by, any Governmental Authority or any other person, except (i) for applicable requirements, if any, of the Exchange Act, the Securities Act, and Blue Sky Laws and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, individually or in the aggregate, would not reasonably be expected to materially impair the ability of such Securityholder to perform such Securityholder’s obligations hereunder.
(iv) There is no material Action pending or, to the knowledge of such Securityholder, threatened against such Securityholder, which in any manner challenges or, individually or in the aggregate, would reasonably be expected to materially delay or impair the ability of such Securityholder to perform such Securityholder’s obligations hereunder.
7. This Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby provided, that, for the avoidance of doubt, the foregoing shall not affect the rights and obligations of the parties under the BCA, any Forward Purchase Agreement or any Subscription Agreement or any documents related thereto or referred to therein. This Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by (i) the applicable Securityholder and (ii) the Company.
8. This Agreement shall not be assigned (whether pursuant to a merger, by operation of law or otherwise) by any party without the prior express written consent of the other parties hereto, except in connection with a Transfer by MCAC to its shareholders, but, with respect to any shareholder of MCAC, only if such shareholder agrees to become bound by the restrictions set forth in this Agreement. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. Any attempted assignment in violation of the terms of this paragraph 8 shall be null and void, ab initio.
9. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed in that State. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any Delaware Chancery Court; provided, that if jurisdiction is not then available in the Delaware Chancery Court, then any such Action may be brought in any federal court located in the State of Delaware or any other Delaware state court. The parties hereto hereby (a) irrevocably submit to the exclusive jurisdiction of the aforesaid courts for themselves and with respect to their respective properties for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, and (b) agree not to commence any Action relating thereto except in the courts described above in Delaware, other than Actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Action arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the Action in any such court is brought in an inconvenient forum, (ii) the venue of such Action is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
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10. Each of the parties hereto hereby waives to the fullest extent permitted by applicable law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement. Each of the parties hereto (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (ii) acknowledges that it and the other hereto have been induced to enter into this Agreement, as applicable, by, among other things, the mutual waivers and certifications in this paragraph 10.
11. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof, and, accordingly, that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in the Court of Chancery of the State of Delaware, County of New Castle, or, if that court does not have jurisdiction, any court of the United States located in the State of Delaware without proof of actual damages or otherwise, in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereto hereby further waives (i) any defense in any action for specific performance that a remedy at law would be adequate and (ii) any requirement under any law to post security or a bond as a prerequisite to obtaining equitable relief.
12. This Agreement shall be valid and enforceable as of the date of this Agreement and may not be revoked by any party hereto; provided that the provisions herein (other than paragraphs 6 through 14) shall not be effective until the consummation of the Closing Date. This Agreement shall not terminate with respect to a Securityholder until the expiration of the Lock-up Period.
13. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by electronic means, including DocuSign, e-mail, or scanned pages shall be effective as delivery of a manually executed counterpart to this Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties hereto has duly executed this Lock-up Agreement as of the date first written above.
| Company | ||
| Future Health ESG Corp. | ||
| By: | /s/ Brad A. Bostic | |
| Name: Brad A. Bostic | ||
| Title: Chief Executive Officer | ||
[Signature page to Lock-up Agreement]
| SECURITYHOLDERS: | ||
| MACARTHUR COURT ACQUISITION CORP. | ||
| By: | /s/ Sanjay Patil | |
| Name: | Sanjay Patil | |
| Title: | Chief Executive Officer | |
[Signature page to Lock-up Agreement]
| BEA HOLDINGS, LLC | ||
| By: | /s/ Brad A. Bostic | |
| Name: | Brad A. Bostic | |
| Title: | Manager | |
| M2 ENTERPRISES HOLDINGS, LLC | ||
| By: | /s/ Travis A. Morgan | |
| Name: | Travis A. Morgan | |
| Title: | Manager | |
| HC1.COM, INC | ||
| By: | /s/ Chris Brown | |
| Name: | Chris Brown | |
| Title: | Chief Operating Officer | |
| MB EQUITY, LLC | ||
| By: | /s/ Travis A. Morgan | |
| Name: | Travis A. Morgan | |
| Title: | Managing Manager | |
| FUTURE HEALTH ESG ASSOCIATES 1, LLC | ||
| By: | /s/ Travis Morgan | |
| Name: | Travis Morgan | |
| Title: | Manager | |
[Signature page to Lock-up Agreement]
| By: | /s/ R. MARK LUBBERS | |
| Name: R. MARK LUBBERS | ||
| By: | /s/ F. JOHN MILLS, MD | |
| Name: F. JOHN MILLS, MD | ||
| By: | /s/ NANCY L. SNYDERMAN, MD | |
| Name: NANCY L. SNYDERMAN, MD | ||
[Signature page to Lock-up Agreement]
| VARIANT CAPITAL LIMITED | ||
| By: | /s/ Qi Su | |
| Name: | Qi Su | |
| Title: | President | |
| HAKIM HOLDING GROUP COMPANY LIMITED | ||
| By: | /s/ Qi Cheng Wang | |
| Name: | Qi Cheng Wang | |
| Title: | Director | |
[Signature page to Lock-up Agreement]
SCHEDULE 1
LOCK-UP EQUITY HOLDERS
MACARTHUR COURT ACQUISITION CORP.
BEA HOLDINGS, LLC
M2 ENTERPRISES HOLDINGS, LLC
HC1.COM, INC
MB EQUITY, LLC
FUTURE HEALTH ESG ASSOCIATES 1, LLC
VARIANT CAPITAL LIMITED
HAKIM HOLDING GROUP COMPANY LIMITED
R MARK LUBBERS
F. JOHN MILLS, MD
NANCY L. SNYDERMAN, MD
Schedule 1
EXHIBIT A
FORM OF JOINDER
Reference is made to that certain Lock-up Agreement, dated as of [ ], 2022, by and among (i) Future Health ESG Corp., a Delaware corporation (the “Company”), and (ii) the Securityholders (as defined therein) (as amended from time to time, the “Lock-up Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Lock-up Agreement.
The undersigned agrees that this joinder to the Lock-up Agreement (this “Joinder”) is being executed and delivered in favor of, and to, the Company for good and valuable consideration.
The undersigned hereby agrees to and does become party to the Lock-up Agreement as a Securityholder. This joinder shall serve as a counterpart signature page to the Lock-up Agreement and by executing below the undersigned is deemed to have executed the Lock-up Agreement with the same force and effect as if originally named a party thereto.
[Remainder of Page Intentionally Left Blank.]
Exhibit A
IN WITNESS WHEREOF, the undersigned has duly executed this joinder to the Lock-up Agreement.
| [NEW SECURITYHOLDER PARTY] | ||
| By: | ||
| Name: | ||
| Title: | ||
| Date: | ||
Exhibit A
Exhibit 10.4
FORM OF AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of [_______], 2022, is made and entered into by and among Excelera Health, Inc. (f/k/a Future Health ESG Corp.), a Delaware corporation (the “Company” or “Future Health”), Future Health ESG Associates 1, LLC (the “Sponsor”), MacArthur Court Acquisition Corp. (“MCAC”), Cantor Fitzgerald & Co. (“Cantor”) and the undersigned parties listed under Future Health Holders on Schedule A hereto (each such party, together with Cantor and the Sponsor, and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 or Section 5.11 of this Agreement, a “Holder” and collectively the “Holders”). Except as otherwise stated, capitalized terms used but not otherwise defined herein shall have the meanings provided in the Business Combination Agreement (as defined below).
RECITALS
WHEREAS, on September 9, 2021, Future Health, Cantor and certain other security holders named therein (each such party, an “Existing Holder” and collectively the “Existing Holders”) entered into that certain Registration Rights Agreement (the “Existing Registration Rights Agreement”) pursuant to which Future Health granted to the Existing Holders certain registration rights with respect to certain securities of Future Health;
WHEREAS, on June 13, 2022, Future Health and MCAC and Excelera DCE, a California corporation (“Excelera”), entered into that certain Business Combination Agreement and Plan of Reorganization (the “Business Combination Agreement”), pursuant to which Future Health will purchase from MCAC, and MCAC will sell to the Company, 100% of the issued and outstanding shares of common stock of Excelera in exchange for 40,000,000 shares of common stock of Future Health, which is being re-named Excelera Health, Inc. (the “Business Combination”) to be issued at the Closing under the Business Combination Agreement (the “Closing Stock Consideration”) and 20,000,000 Earnout Shares, which is intended to be a tax-free reorganization within the meaning of Sections 368(a)(1)(C) or (D) of the Internal Revenue Code of 1986, as amended;
WHEREAS, concurrently with the execution of the Business Combination Agreement, Future Health and a certain investor entered into a forward purchase agreement (the “Forward Purchase Agreement”) pursuant to which such investor purchased, at its discretion, shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), in open market, and may have purchased certain Additional Shares (as defined in the Forward Purchase Agreement) from the Company;
WHEREAS, concurrently with the closing of the Business Combination (the “Closing”), a certain investor purchased shares of Common Stock in a private placement or placements pursuant to a subscription agreement (the “PIPE Subscription Agreement”) between Future Health and such certain investor dated June 13, 2022;
WHEREAS, on September 9, 2021, Future Health, Cantor and the other underwriters named on Schedule A thereto (the “IPO Underwriters”), entered into that certain underwriting agreement (the “Underwriting Agreement”) pursuant to which Future Health agreed to issue and sell to the Cantor and the IPO Underwriters, severally and not jointly, and Cantor and the IPO Underwriters agreed to purchase from Future Health, severally and not jointly, a number of units;
WHEREAS, on June 13, 2022, the parties to the Underwriting Agreement entered into that certain amendment to the Underwriting Agreement (the “Underwriting Agreement Amendment”), whereby the Company agreed to issue up to 272,727 shares of Common Stock (“Deferred Fee Shares”) to Cantor upon the consummation of the Business Combination;
WHEREAS, after the Closing, the Holders will own shares of Common Stock, and the initial stockholders and Cantor will own warrants to purchase 7,375,000 shares of Common Stock (the “Private Placement Warrants”); and
WHEREAS, the Company and the Existing Holders desire to amend and restate the Existing Registration Rights Agreement, pursuant to which the Company shall grant the Holders certain registration rights with respect to certain securities of the Company, as set forth in this Agreement.
NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE
I
DEFINITIONS
1.1 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Additional Holder” shall have the meaning given in Section 5.11.
“Additional Holder Common Stock” shall have the meaning given in Section 5.11.
“Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or Chief Financial Officer of the Company, after consultation with counsel to the Company, (a) would be required to be made in (i) any Registration Statement in order for the applicable Registration Statement not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any Prospectus in order for the applicable Prospectus not to include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) the Company has a bona fide business purpose for not making such information public.
“Agreement” shall have the meaning given in the Preamble.
“Block Trade” shall have the meaning given to it in subsection 2.4.1.
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“Board” shall mean the board of directors of the Company.
“Business Combination” shall have the meaning given in the Recitals hereto.
“Business Combination Agreement” shall have the meaning given in the Recitals hereto.
“Closing” shall have the meaning given in the Recitals hereto.
“Commission” shall mean the Securities and Exchange Commission.
“Common Stock” shall have the meaning given in the Recitals hereto.
“Company” shall have the meaning given in the Preamble.
“Deferred Fee Shares” shall have the meaning given in the Recitals hereto.
“Demanding Holder” shall have the meaning given in subsection 2.1.5.
“Effectiveness Period” shall have the meaning given in subsection 3.1.1 of this Agreement.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Existing Holders” shall have the meaning given in the Recitals hereto.
“Existing Registration Rights Agreement” shall have the meaning given in the Recitals hereto.
“Financial Counterparty” shall have the meaning given in subsection 2.4.1 of this Agreement.
“Forward Purchase Agreement” shall have the meaning given in the Recitals hereto.
“Future Health Holders” shall mean the parties listed under Future Health Holders on Schedule A hereto.
“Holder Indemnified Persons” shall have the meaning given in subsection 4.1.1 of this Agreement.
“Holder Information” shall have the meaning given in subsection 4.1.2.
“Holders” shall have the meaning given in the Preamble.
“Joinder” shall have the meaning given in Section 5.11.
“Maximum Number of Securities” shall have the meaning given in subsection 2.1.6 of this Agreement.
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“MCAC” shall have the meaning given in the Recitals hereto.
“MCAC Shareholders” shall mean the holders of record of the shares of common stock of MCAC, as maintained in the books and records of MCAC or its transfer agent at the time of determination.
“Minimum Underwritten Offering Threshold” shall have the meaning given in subsection 2.1.5.
“Misstatement” shall mean, in the case of a Registration Statement, an untrue statement of a material fact or an omission to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and in the case of a Prospectus, an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
“Other Coordinated Offering” shall have the meaning given to it in subsection 2.4.1.
“Permitted Transferees” shall mean any person or entity to whom a Holder is permitted to transfer Registrable Securities under applicable securities laws.
“Piggyback Registration” shall have the meaning given in subsection 2.2.1 of this Agreement.
“PIPE Subscription Agreement” shall have the meaning given in the Recitals hereto.
“Private Placement Warrants” shall have the meaning given in the Recitals hereto.
“Pro Rata” shall have the meaning given in subsection 2.1.6 of this Agreement.
“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable Security” shall mean (a) the Private Placement Warrants (including any shares of Common Stock issued or issuable upon the exercise of any such Private Placement Warrants), (b) any shares of Common Stock issued or to be issued to any Holders in connection with the Business Combination and, subject to compliance by a MCAC Shareholder with subsection 5.2.1, any shares of Common Stock distributed by MCAC to the MCAC Shareholders as part of, or following, the Business Combination, (c) any shares of Common Stock purchased pursuant to the PIPE Subscription Agreement, (d) any Additional Shares (as defined in the Forward Purchase Agreement) purchased pursuant to the Forward Purchase Agreement, (e) any outstanding shares of Common Stock or any other equity security (including the shares of Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by a Holder as of the date of this Agreement, including shares of Common Stock issued to Future Health’s initial stockholders and shares of Common Stock held by anchor investors, (f) any Additional Holder Common Stock, (g) any shares of Common Stock issued or issuable upon the exercise of any equity security of the Company issuable upon conversion of any working capital loans in an amount up to $2,000,000 made to the Company by a Holder, (h) any Deferred Fee Shares issued to Cantor, and (i) any other equity security of the Company or any of its subsidiaries, or any successor, issued or issuable with respect to any such share of the Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation, spin-off or reorganization; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (A) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (B) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; (D) such securities have been sold without registration pursuant to Section 4(a)(1) of the Securities Act or Rule 144 or Rule 145 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission); or (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
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“Registration” shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and any such registration statement having been declared effective by, or become effective pursuant to the rules promulgated by, the Commission.
“Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
| (A) | all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc. and any national securities exchange on which the shares of Common Stock is then listed); |
| (B) | fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities); |
| (C) | reasonable printing, messenger, telephone and delivery expenses; |
| (D) | reasonable fees and disbursements of counsel for the Company; |
| (E) | reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration or Underwritten Offering; |
| (F) | the fees and expenses incurred in connection with the listing of any Registrable Securities on each national securities exchange on which the shares of Common Stock is then listed; |
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| (G) | the fees and expenses incurred by the Company in connection with any Underwritten Offerings or other offering involving an Underwriter; and |
| (H) | reasonable fees and expenses of up to $50,000 of one (1) legal counsel in a Registration selected jointly by the majority-in-interest of Registrable Securities held by the Demanding Holders initiating an Underwritten Demand, Block Trade or Other Coordinated Offering, and the Requesting Holders participating in an Underwritten Offering and the Holders participating in a Piggyback Registration, as applicable. |
“Registration Statement” shall mean any registration statement under the Securities Act that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holder” shall have the meaning given in subsection 2.1.5 of this Agreement.
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.
“Shelf Registration” shall have the meaning given in subsection 2.1.1 of this Agreement.
“Sponsor” shall have the meaning given in the Preamble.
“Subsequent Shelf Registration Statement” shall have the meaning given in subsection 2.1.3.
“Transfer” shall mean the (a) sale or assignment of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).
“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal or as broker, placement agent or sales agent pursuant to a Registration and not as part of such dealer’s market-making activities.
“Underwritten Demand” shall have the meaning given in subsection 2.1.5 of this Agreement.
“Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Withdrawal Notice” shall have the meaning given in subsection 2.1.7.
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ARTICLE II
REGISTRATIONS
2.1 Registration.
2.1.1 Shelf Registration. The Company agrees that, within thirty (30) calendar days after the consummation of the Business Combination, the Company will use its commercially reasonable efforts to file with the Commission (at the Company’s sole cost and expense) a Registration Statement registering the resale or other disposition of the Registrable Securities (a “Shelf Registration”), which Shelf Registration may also include shares of Common Stock that may be issuable upon exercise of outstanding warrants, or shares that may have been purchased in any private placement that was consummated at or prior to the Closing. Such Shelf Registration shall provide for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available (the “Plan of Distribution”) to, and requested by, any Holder named therein.
2.1.2 Effective Registration. The Company shall use its commercially reasonable efforts to cause such Registration Statement to become effective by the Commission as soon as reasonably practicable after the initial filing of the Registration Statement. Subject to the limitations contained in this Agreement, the Company shall effect any Shelf Registration on such appropriate registration form of the Commission (a) as shall be selected by the Company and (b) as shall permit the resale or other disposition of the Registrable Securities by the Holders. The Company shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 60th calendar day (or the 90th calendar day if the Commission notifies the Company that it will “review” the Registration Statement) following the Closing and (ii) the 10th business day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effective Date”). If at any time a Registration Statement filed with the Commission pursuant to subsection 2.1.1 is effective and a Holder provides written notice to the Company that it intends to effect an offering of all or part of the Registrable Securities included on such Registration Statement, the Company will use its commercially reasonable efforts to amend or supplement such Registration Statement as may be necessary in order to enable such offering to take place in accordance with the terms of this Agreement.
2.1.3 Subsequent Shelf Registration. If any Registration Statement ceases to be effective under the Securities Act for any reason at any time while Registrable Securities are still outstanding, the Company shall use its commercially reasonable efforts to as promptly as is reasonably practicable cause such Registration Statement to again become effective under the Securities Act (including using its commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness of such Registration Statement), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable to amend such Registration Statement in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Registration Statement or file an additional Registration Statement as a Shelf Registration (a “Subsequent Shelf Registration Statement”) registering the resale of all Registrable Securities (determined as of two (2) business days prior to such filing), and pursuant to the Plan of Distribution, and requested by, any Holder named therein. If a Subsequent Shelf Registration Statement is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration Statement to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent Shelf Registration Statement shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities Act) if the Company is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent applicable eligibility determination date) and (ii) keep such Subsequent Shelf Registration Statement continuously effective, available for use to permit the Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities outstanding. Any such Subsequent Shelf Registration Statement shall be a Registration Statement on Form S-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration Statement shall be on another appropriate form.
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2.1.4 Additional Registrable Securities. In the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon written request of the Sponsor or a Holder, in each case holding at least five percent (5%) of the Registrable Securities, shall promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered, at the Company’s option, by any then available Registration Statement (including by means of a post-effective amendment) or by filing a Subsequent Shelf Registration Statement and cause the same to become effective as soon as practicable after such filing and such Registration Statement or Subsequent Shelf Registration Statement shall be subject to the terms hereof; provided, however, that the Company shall only be required to cause such Registrable Securities to be so covered once per calendar year for each of the Sponsor and the Holders.
2.1.5 Underwritten Offering. Subject to the provisions of subsection 2.1.6 and Section 2.5 of this Agreement, a majority-in-interest of the Existing Holders or a majority-in-interest of the Holders other than the Existing Holders (any of the Sponsor, Holder or group of Holders being in such case, a “Demanding Holder”) may make a written demand for an Underwritten Offering pursuant to a Registration Statement filed with the Commission in accordance with subsection 2.1.1 of this Agreement (an “Underwritten Demand”); provided, that the Company shall only be obligated to effect an Underwritten Offering if such offering shall include Registrable Securities proposed to be sold by the Demanding Holder, either individually or together with other Demanding Holders, with a total offering price reasonably expected to exceed, in the aggregate, $35 million in respect of a Registration Statement on Form S-1 and $15 million in respect of a Registration Statement on Form S-3 (the “Minimum Underwritten Offering Threshold”). The Demanding Holder shall have the responsibility to engage an underwriter(s) (which shall consist of one (1) or more reputable nationally or regionally recognized investment banks); provided that such selection shall be subject to the consent of the Company. The Company shall have no responsibility for engaging any underwriter(s) for an Underwritten Offering. The Company shall, within ten (10) days of the Company’s receipt of the Underwritten Demand, notify, in writing, all other Holders of such demand, and each Holder who thereafter requests to include all or a portion of such Holder’s Registrable Securities in such Underwritten Offering pursuant to such Underwritten Demand (each such Holder, a “Requesting Holder”) shall so notify the Company, in writing, within five (5) days after the receipt by such Holder of the notice from the Company. Upon receipt by the Company of any such written notification from a Requesting Holder(s), such Requesting Holder(s) shall be entitled to have their Registrable Securities included in such Underwritten Offering pursuant to such Underwritten Demand. In such event, the right of any Holder or Requesting Holder to registration pursuant to this subsection 2.1.5, shall be conditioned upon such Holder’s or Requesting Holder’s participation in such underwriting and the inclusion of such Holder’s or Requesting Holder’s Registrable Securities in the underwriting to the extent provided herein. All such Holders or Requesting Holders proposing to distribute their Registrable Securities through such Underwritten Offering under this subsection 2.1.5 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Demanding Holders initiating such Underwritten Offering. Notwithstanding the foregoing, the Company is not obligated to effect more than an aggregate of three (3) Underwritten Offerings demanded by MCAC or the MCAC Shareholders that become Holders and an aggregate of three (3) Underwritten Offerings demanded by the Future Health Holders pursuant to this subsection 2.1.5 and is not obligated to effect an Underwritten Offering pursuant to this subsection 2.1.5 within ninety (90) days after the closing of an Underwritten Offering.
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2.1.6 Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Offering, pursuant to an Underwritten Demand, in good faith, advises or advise the Company, the Demanding Holders, the Requesting Holders and other persons or entities holding Registrable Securities or other equity securities of the Company that were requested to be included in such Underwritten Offering, taken together with all other shares of Common Stock or other securities which the Company desires to sell and the shares of Common Stock or other securities, if any, as to which registration has been requested pursuant to written contractual piggyback registration rights held by other equity holders of the Company who desire to sell (if any) that the dollar amount or number of Registrable Securities or other equity securities of the Company requested to be included in such Underwritten Offering exceeds the maximum dollar amount or maximum number of equity securities of the Company that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding Holders (pro rata based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Offering, regardless of the number of shares held by each such person and the aggregate number of Registrable Securities that the Demanding Holders have requested be included in such Underwritten Offering (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of the Requesting Holders, Pro Rata, which can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock or other equity securities of the Company that the Company desires to sell and that can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the shares of Common Stock or other equity securities of the Company held by other persons or entities that the Company is obligated to include pursuant to separate written contractual arrangements with such persons or entities and that can be sold without exceeding the Maximum Number of Securities.
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2.1.7 Withdrawal. Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing such Underwritten Offering, a majority-in-interest of the Demanding Holders initiating an Underwritten Offering shall have the right to withdraw from such Underwritten Offering for any or no reason whatsoever upon written notification (a “Withdrawal Notice”) to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Underwritten Offering, prior to the public announcement of the Underwritten Offering by the Company; provided that the Sponsor or a Holder may elect to have the Company continue an Underwritten Offering if the Minimum Underwritten Offering Threshold would still be satisfied by the Registrable Securities proposed to be sold in the Underwritten Offering by the Sponsor, the Holders or any of their respective Permitted Transferees, as applicable. If withdrawn, a demand for an Underwritten Offering shall constitute a demand for an Underwritten Offering by the withdrawing Demanding Holder for purposes of subsection 2.1.6, unless either (i) such Demanding Holder has not previously withdrawn any Underwritten Offering or (ii) such Demanding Holder reimburses the Company for all Registration Expenses with respect to such Underwritten Offer (or, if there is more than one Demanding Holder, a pro rata portion of such Registration Expenses based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Offering); provided that, if the Sponsor or a Holder elects to continue an Underwritten Offering pursuant to the proviso in the immediately preceding sentence, such Underwritten Offering shall instead count as an Underwritten Offering demanded by the Sponsor or such Holder, as applicable, for purposes of subsection 2.1.6. Following the receipt of any Withdrawal Notice, the Company shall promptly forward such Withdrawal Notice to any other Holders that had elected to participate in such Underwritten Offering. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with an Underwritten Offering prior to its withdrawal under this subsection 2.1.7, other than if a Demanding Holder elects to pay such Registration Expenses pursuant to clause (ii) of the second sentence of this subsection 2.1.7.
2.2 Piggyback Registration.
2.2.1 Piggyback Rights. Subject to the provisions of subsection 2.2.2 and Section 2.5 hereof, if, at any time on or after the date the Company consummates a Business Combination, the Company proposes to consummate an Underwritten Offering for its own account (other than a debt offering) or for the account of stockholders of the Company filed pursuant to Section 2.1.5, then the Company shall give written notice of such proposed action to all of the Holders as soon as practicable, which notice shall (i) describe the amount and type of securities to be included, the intended method(s) of distribution and the name of the proposed managing Underwriter or Underwriters, if any, and (ii) offer to all of the Holders the opportunity to include such number of Registrable Securities as such Holders may request in writing within five (5) days, in each case after receipt of such written notice (such Registration a “Piggyback Registration”). The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its commercially reasonable efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such Piggyback Registration and to permit the resale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders proposing to include Registrable Securities in an Underwritten Offering under this subsection 2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.
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2.2.2 Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of shares of equity securities of the Company that the Company desires to sell, taken together with (i) the shares of equity securities of the Company, if any, as to which the Underwritten Offering has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which a Piggyback Registration has been requested pursuant to Section 2.2 of this Agreement and (iii) the shares of equity securities of the Company, if any, as to which inclusion in the Underwritten Offering has been requested pursuant to separate written contractual piggyback registration rights of other stockholders of the Company, exceeds the Maximum Number of Securities, then:
(a) If the Underwritten Offering is undertaken for the Company’s account, the Company shall include in any such Underwritten Offering (A) first, the shares of Common Stock or other equity securities of the Company that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders requesting a Piggyback Registration pursuant to subsection 2.2.1 of this Agreement, Pro Rata, which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other equity securities of the Company, if any, as to which inclusion in the Underwritten Offering has been requested pursuant to written contractual piggyback registration rights of other stockholders of the Company, which can be sold without exceeding the Maximum Number of Securities;
(b) If the Underwritten Offering is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Underwritten Offering (A) first, the shares of Common Stock or other equity securities of the Company, if any, of such requesting persons or entities, other than the Holders, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders requesting a Piggyback Registration pursuant to subsection 2.2.1 of this Agreement, Pro Rata, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other equity securities of the Company that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B), and (C), the shares of Common Stock or other equity securities of the Company for the account of other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities; or
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(c) If the Underwritten Offering is pursuant to a request by Holder(s) of Registrable Securities pursuant to subsection 2.1.5 hereof, then the Company shall include in any such Registration or registered offering securities in the priority set forth in subsection 2.1.6.
2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities (other than a Demanding Holder, whose right to withdraw from an Underwritten Offering, and related obligations, shall be governed by subsection 2.1.7) shall have the right to withdraw from a Piggyback Registration upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the commencement of the Underwritten Offering. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this subsection 2.2.3. The Company (whether on its own good faith determination or as a result of a withdrawal by persons making a demand pursuant to written contractual obligations) may withdraw an Underwritten Offering undertaken for the Company’s account at any time prior to the effectiveness of such Registration Statement.
2.2.4 Unlimited Piggyback Registration Rights. For purposes of clarity, subject to subsection 2.1.7, any Piggyback Registration or Underwritten Offering effected pursuant to Section 2.2 of this Agreement shall not be counted as an Underwritten Offering pursuant to an Underwritten Demand effected under Section 2.1 of this Agreement.
2.3 Reserved.
2.4 Block Trades and Other Coordinated Offerings.
2.4.1 Notwithstanding any other provision of this Article II, but subject to Section 3.4, at any time and from time to time when an effective Registration Statement is on file with the Commission, if a Demanding Holder wishes to engage in (a) an underwritten registered offering not involving a “roadshow,” an offer commonly known as a “block trade” (a “Block Trade”) or (b) an “at the market” or similar registered offering through a broker, sales agent or distribution agent, whether as agent or principal (an “Other Coordinated Offering”), in each case, with a total offering price reasonably expected to exceed, in the aggregate, either (x) $25 million or (y) all remaining Registrable Securities held by the Demanding Holder; provided that the total offering price is reasonably expected to exceed $5 million in the aggregate, then if such Demanding Holder requires any assistance from the Company pursuant to this Section 2.4, such Holder shall notify the Company of the Block Trade or Other Coordinated Offering at least five (5) business days prior to the day such offering is to commence and the Company shall as expeditiously as possible use its commercially reasonable efforts to facilitate such Block Trade or Other Coordinated Offering; provided that the Demanding Holders representing a majority of the Registrable Securities wishing to engage in the Block Trade or Other Coordinated Offering shall use commercially reasonable efforts to work with the Company and any Underwriters or brokers, sales agents or placement agents (each, a “Financial Counterparty”) (including by disclosing the maximum number of Registrable Securities proposed to be the subject of such Block Trade or Other Coordinated Offering) prior to making such request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related to the Block Trade or Other Coordinated Offering.
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2.4.2 Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used in connection with a Block Trade or Other Coordinated Offering, a majority-in interest of the Demanding Holders initiating such Block Trade or Other Coordinated Offering shall have the right to submit a Withdrawal Notice to the Company, the Underwriter or Underwriters (if any) and Financial Counterparty (if any) of their intention to withdraw from such Block Trade or Other Coordinated Offering. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Block Trade or Other Coordinated Offering prior to its withdrawal under this subsection 2.4.2.
2.4.3 Notwithstanding anything to the contrary in this Agreement, Section 2.2 shall not apply to a Block Trade or Other Coordinated Offering initiated by a Demanding Holder pursuant to Section 2.4 of this Agreement.
2.4.4 The Demanding Holder in a Block Trade or Other Coordinated Offering shall have the right to select the Underwriters and Financial Counterparty (if any) for such Block Trade or Other Coordinated Offering (in each case, which shall consist of one or more reputable nationally recognized investment banks).
2.4.5 A Holder in the aggregate may demand no more than two (2) Block Trades or Other Coordinated Offerings pursuant to this Section 2.4 in any twelve (12) month period. For the avoidance of doubt, any Block Trade or Other Coordinated Offering effected pursuant to this Section 2.4 shall not be counted as a demand for an Underwritten Offering pursuant to subsection 2.1.5 hereof.
2.5 Restrictions on Registration Rights. If (A) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date one hundred and twenty (120) days after the effective date of, a Company initiated Registration and provided that the Company has delivered written notice to the Holders prior to receipt of a Demand Registration pursuant to subsection 2.2.1 and it continues to actively employ, in good faith, all reasonable efforts to cause the applicable Registration Statement to become effective; (B) the Holders have requested an Underwritten Registration and the Company and the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer; or (C) in the good faith judgment of the Board such Underwritten Offering would be seriously detrimental to the Company and the Board concludes as a result that it is essential to defer the undertaking of such Underwritten Offering at such time, then in each case, as applicable, the Company shall furnish to such Holders a certificate signed by the Chairman of the Board stating the applicable reason(s) set forth in Clauses (A) through (C) above underlying the Company’s decision to defer the undertaking of such Underwritten Offering. In such event, the Company shall have the right to defer such offering for a period of not more than sixty (60) days; provided, however, that the Company shall not defer its obligations in this manner more than once in any twelve (12) month period.
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2.6 Certain Events or Conditions. The Company’s obligation under this Article II, shall, for the avoidance of doubt, be subject to Section 3.4.
ARTICLE
III
COMPANY PROCEDURES
3.1 General Procedures. In connection with effecting any Underwritten Offering, Block Trade, and/or Other Coordinated Offering, subject to applicable law and any regulations promulgated by any securities exchange on which the Company’s equity securities are then listed, each as interpreted by the Company with the advice of its counsel, the Company shall use its commercially reasonable efforts to effect such Registration or Underwritten Offering to permit the resale or other disposition of such Registrable Securities in accordance with the intended plan of distribution thereof (and including all manners of distribution in such Registration Statement as Holders may reasonably request in connection with the filing of such Registration Statement and as permitted by law, including distribution of Registrable Securities to a Holder’s members, securityholders or partners), and pursuant thereto the Company shall, as expeditiously as possible and to the extent applicable:
3.1.1 prepare and file with the Commission after the consummation of the Business Combination a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective in accordance with Section 2.1, including filing a replacement Registration Statement, if necessary, and remain effective until all Registrable Securities covered by such Registration Statement have been sold or have ceased to be Registrable Securities (such period, the “Effectiveness Period”);
3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, (a) as may be reasonably requested by any Holder that holds at least a majority-in-interest of the Registrable Securities registered on such Registration Statement or any Underwriter, or (b) as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the plan of distribution provided by the Holders and as set forth in such Registration Statement or supplement to the Prospectus or have ceased to be Registrable Securities;
3.1.3 prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities included in such Registration or Underwritten Offering, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus (including each preliminary Prospectus) and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or Underwritten Offering or the legal counsel for any such Holders may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holders; provided that the Company will not have any obligation to provide any document pursuant to this subsection 3.1.3 that is available on the Commission’s EDGAR system;
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3.1.4 prior to any Underwritten Offering of Registrable Securities, use its commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request (or provide evidence satisfactory to such Holders that the Registrable Securities are exempt from such registration or qualification) and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities to be listed on each national securities exchange or automated quotation system on which similar securities issued by the Company are then listed;
3.1.6 provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement or Underwritten Offering;
3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
3.1.8 during the Effectiveness Period, furnish a conformed copy of each filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus or any document that is to be incorporated by reference into such Registration Statement or Prospectus, promptly after such filing of such documents with the Commission to each seller of such Registrable Securities or its counsel; provided that the Company will not have any obligation to provide any document pursuant to this subsection 3.1.8 that is available on the Commission’s EDGAR system;
3.1.9 notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 of this Agreement;
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3.1.10 in the event of an Underwritten Offering, a Block Trade, an Other Coordinated Offering, or sale by a Financial Counterparty pursuant to such Registration, permit, to the extent customary for a transaction of such type, a representative of the Holders (such representative to be selected by a majority of the Holders), the Underwriters, or other financial institutions facilitating such Underwritten Offering, Block Trade, Other Coordinated Offering or other sale pursuant to such Registration, if any, and any attorney, consultant or accountant retained by such Holders or Underwriter to participate, at each such person’s or entity’s own expense, in the preparation of the Registration Statement or the Prospectus, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, financial institution, attorney, consultant or accountant in connection with the Registration; provided, however, that such representatives or Underwriters or financial institutions agree to confidentiality arrangements in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;
3.1.11 obtain a comfort letter from the Company’s independent registered public accountants in the event of an Underwritten Offering, a Block Trade or sale by a Financial Counterparty pursuant to such Registration (subject to the Underwriters, or other financial institutions facilitating such Underwritten Offering, Block Trade or Other Coordinated Offering providing such certification or representation reasonably requested by the Company’s independent registered public accountants and the Company’s counsel), in customary form and covering such matters of the type customarily covered by comfort letters as the managing Underwriter or other similar type of sales agent or placement agent may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Holders;
3.1.12 in the event of an Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a Financial Counterparty pursuant to such Registration, on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain, to the extent customary for transactions of such type, an opinion, dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the participating Holders, the Financial Counterparty, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the participating Holders, Financial Counterparty or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to such participating Holders, Financial Counterparty or Underwriter;
3.1.13 in the event of an Underwritten Offering or a Block Trade, or an Other Coordinated Offering or sale by a Financial Counterparty pursuant to such Registration to which the Company has consented, to the extent reasonably requested by such Financial Counterparty in order to engage in such offering, allow the Financial Counterparty to conduct customary “underwriter’s due diligence” with respect to the Company;
3.1.14 in the event of any Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a Financial Counterparty pursuant to such Registration, enter into and perform its obligations under an underwriting or other purchase or sales agreement, in usual and customary form, with the managing Underwriter or the Financial Counterparty of such offering or sale;
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3.1.15 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);
3.1.16 with respect to an Underwritten Offering pursuant to subsection 2.1.5 use its commercially reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in any Underwritten Offering; and
3.1.17 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the participating Holders, consistent with the terms of this Agreement, in connection with such Registration.
Notwithstanding the foregoing, the Company shall not be required to provide any documents or information to an Underwriter or Financial Counterparty if such Underwriter or Financial Counterparty has not then been named with respect to the applicable Underwritten Offering or other offering involving a registration as an Underwriter or Financial Counterparty, as applicable.
3.2 Registration Expenses. The Registration Expenses in respect of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all fees and expenses of any legal counsel representing the Holders, in each case pro rata based on the number of Registrable Securities that such Holders have sold in such Registration.
3.3 Requirements for Participation in Underwritten Offerings. Notwithstanding anything in this Agreement to the contrary, if any Holder does not provide the Company with its requested Holder Information within a reasonable amount of time after such request (and a minimum of five (5) business days), the Company may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if the Company determines, based on the advice of counsel, that such information is necessary to effect the registration and such Holder continues thereafter to withhold such information. No person or entity may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person or entity (i) agrees to sell such person’s or entity’s securities on the basis provided in any underwriting arrangements approved by the Company in the case of an Underwritten Offering initiated by the Company, and approved by the Demanding Holders in the case of an Underwritten Offering initiated by the Demanding Holders and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements. Subject to the minimum thresholds set forth in Section 2.1.5 and 2.4, the exclusion of a Holder’s Registrable Securities as a result of this Section 3.3 shall not affect the registration of the other Registrable Securities to be included in such Registration.
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3.4 Suspension of Sales; Adverse Disclosure; Restrictions on Registration Rights.
3.4.1 Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains or includes a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until he, she or it has received copies of a supplemented or amended Registration Statement or Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until he, she or it is advised in writing by the Company that the use of the Registration Statement or Prospectus may be resumed.
3.4.2 Subject to subsection 3.4.4, if the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration or Underwritten Offering at any time would (a) require the Company to make an Adverse Disclosure, (b) require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, or (c) in the good faith judgment of the majority of the Board, be seriously detrimental to the Company, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time determined in good faith by the Company to be necessary for such purpose. Notwithstanding the foregoing, the Company may delay or suspend continued use of a Registration Statement or Prospectus in respect of a Registration or Underwritten Offering in order to file and make effective a post-effective amendment to such Registration Statement in connection with the filing of the Company’s Annual Report on Form 10-K, and such suspension shall not be subject to the provisions of subsection 3.4.4. In the event the Company exercises its rights under the preceding sentences in this Section 3.4, the Holders agree to suspend, immediately upon their receipt of the notices referred to in this Section 3.4, their use of the Registration Statement or Prospectus in connection with any resale or other disposition of Registrable Securities. The Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.
3.4.3 Subject to subsection 3.4.4, (a) during the period starting with the date thirty (30) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date sixty (60) days after the effective date of, a Company- initiated Registration and provided that the Company continues to actively employ, in good faith, all reasonable efforts to maintain the effectiveness of the applicable Registration Statement, or (b) if, pursuant to subsection 2.1.5, Holders have requested an Underwritten Offering and the Company and Holders are unable to obtain the commitment of underwriters to firmly underwrite such offering, the Company may, upon giving prompt written notice of such action to the Holders, delay any other registered offering pursuant to subsection 2.1.5 or Section 2.4.
3.4.4 The right to delay or suspend any filing, initial effectiveness or continued use of a Registration Statement pursuant to subsection 3.4.2 or a registered offering pursuant to subsection 3.4.3 shall be exercised by the Company on not more than two (2) occasions and, in the aggregate, for not more than sixty (60) consecutive calendar days or more than one hundred-twenty (120) total calendar days in each case, during any twelve (12)-month period.
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3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act. The Company further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to resell or otherwise dispose of shares of Registrable Securities held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any customary legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
3.6 Limitations on Registration Rights. Notwithstanding anything herein to the contrary, (i) Cantor may not exercise its rights under Sections 2.1 and 2.2 hereunder after five (5) and seven (7) years, respectively, from the effective date of the Company’s registration statement on Form S-1, File No. 333-258911, and (ii) Cantor may not exercise its rights under Section 2.1 more than one time.
ARTICLE
IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers, directors, employees, advisors, agents, representatives, members and each person who controls such Holder (within the meaning of the Securities Act) (collectively, the “Holder Indemnified Persons”) against all losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees and inclusive of all reasonable attorneys’ fees arising out of the enforcement of each such persons’ rights under this Section 4.1) as incurred arising out of or resulting from any Misstatement or alleged Misstatement, except insofar as the same are caused by or contained or included (or in the case of an omission, not contained or included) in any information furnished in writing to the Company by or on behalf of such Holder Indemnified Person specifically for use therein.
4.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or any Prospectus (the “Holder Information”) and, to the extent permitted by law, shall indemnify and hold harmless the Company, its officers, directors, employees, advisors, agents, representatives and each person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees and inclusive of all reasonable attorneys’ fees arising out of the enforcement of each such persons’ rights under this Section 4.1) resulting from any Misstatement or alleged Misstatement, but only to the extent that the same are made in reliance on and in conformity with information relating to the Holder so furnished in writing to the Company by or on behalf of such Holder specifically for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities in proportion to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement giving rise to such indemnification obligation.
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4.1.3 Any person or entity entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim or there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, not to be unreasonably withheld or delayed, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement or admission of fault and culpability on the part of such indemnified party or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
4.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, employee, advisor, agent, representative, member or controlling person or entity of such indemnified party and shall survive the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.
4.1.5 If the indemnification provided under Section 4.1 of this Agreement is held by a court of competent jurisdiction to be unavailable to an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall, to the extent permitted by law, contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by a court of law by reference to, among other things, whether the Misstatement or alleged Misstatement relates to information supplied by such indemnifying party or such indemnified party and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this subsection 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 of this Agreement, any reasonable legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
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ARTICLE
V
MISCELLANEOUS
5.1 Notices. Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person or by courier service or sent by overnight mail via a reputable overnight carrier, in each case providing evidence of delivery or (iii) transmission by facsimile or email. Each notice or communication that is mailed, delivered or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third (3rd) business day following the date on which it is mailed, in the case of notices delivered by courier service, hand delivery, or overnight mail at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation, and in the case of notices delivered by facsimile or email, at such time as it is successfully transmitted to the addressee. Any notice or communication under this Agreement must be addressed, if to the Company, to: [____], Attention: [_____], or by email at: [____], or if to any Holder, to the address of such Holder as it appears in the applicable register for the Registrable Securities or such other address as may be designated in writing by such Holder (including on the signature pages hereto). Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in this Section 5.1.
5.2 Assignment; No Third Party Beneficiaries.
5.2.1 This Agreement and the rights, duties and obligations of the Company and the Holders of Registrable Securities, as the case may be, hereunder may not be assigned or delegated by the Company or the Holders of such Registrable Securities, as the case may be, in whole or in part, except (i) in connection with a Transfer of Registrable Securities by such Holder to a Permitted Transferee or (ii) in connection with a Transfer of Registrable Securities by MCAC to a MCAC Shareholder, but only if such Permitted Transferee or MCAC Shareholder agrees to become bound by the restrictions set forth in this Agreement.
5.2.2 This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors.
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5.2.3 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 5.2 of this Agreement.
5.2.4 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.1 of this Agreement and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any assignment made other than as provided in this Section 5.2 shall be null and void.
5.3 Counterparts. This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
5.4 Adjustments. If there are any changes in the Common Stock as a result of share split, share dividend, combination or reclassification, or through merger, consolidation, recapitalization or other similar event, appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations under this Agreement shall continue with respect to the Common Stock as so changed.
5.5 Governing Law; Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed in that State. All actions arising out of or relating to this Agreement (“Actions”) shall be heard and determined exclusively in any Delaware Chancery Court; provided, that if jurisdiction is not then available in the Delaware Chancery Court, then any such Action may be brought in any federal court located in the State of Delaware or any other Delaware state court. The parties hereto hereby (a) irrevocably submit to the exclusive jurisdiction of the aforesaid courts for themselves and with respect to their respective properties for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, and (b) agree not to commence any Action relating thereto except in the courts described above in Delaware, other than Actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Action arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the Action in any such court is brought in an inconvenient forum, (ii) the venue of such Action is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
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5.6 Trial by Jury. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
5.7 Amendments and Modifications. Upon the written consent of (i) the Company, (ii) the Holders of at least a majority in interest of the Registrable Securities held by the Holders at the time in question and (iii), for so long as the Sponsor and its affiliates hold five percent (5%) or more of the outstanding shares of Common Stock, the Sponsor, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, (a) any amendment hereto or waiver hereof that adversely affects any Holder, solely in his, her or its capacity as a holder of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of each such Holder so affected and (b) any amendment or waiver hereof that adversely affects the rights expressly granted to the Sponsor shall require the consent of the Sponsor. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
5.8 Other Registration Rights. The Company represents and warrants that no person, other than (a) a Holder, (b) the parties to that certain Subscription Agreement, dated June 13, 2022, by and between the Company and certain investors, (c) the parties to that certain Forward Purchase Agreement dated June 13, 2022 and (d) holders of the Company’s warrants pursuant to that certain Warrant Agreement, dated as of September 9, 2021, by and between the Company and Continental Stock Transfer & Trust Company, and (e) MCAC, the MCAC Shareholders and their successors and permitted assigns under the Earnout Shares Registration Rights Agreement, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities for its own account or for the account of any other person. Further, the Company represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
5.9 Term. This Agreement shall terminate upon the earlier of (i) the fifth (5th) anniversary of the date of this Agreement and (ii) with respect to any Holder, the date as of which such Holder ceases to hold any Registrable Securities. The provisions of Article IV shall survive any termination.
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5.10 Holder Information. Each Holder agrees, if requested in writing, to represent to the Company the total number of Registrable Securities held by such Holder in order for the Company to make determinations hereunder.
5.11 Additional Holders; Joinder. In addition to persons or entities who may become Holders pursuant to Section 5.2 hereof, subject to the prior written consent of the majority-in-interest of the Holders and, for so long as the Sponsor and its affiliates own five percent (5%) or more of the outstanding Common Stock, the Sponsor, the Company may make any person or entity who acquires Common Stock or rights to acquire Common Stock after the date hereof a party to this Agreement (each such person or entity, an “Additional Holder”) by obtaining an executed joinder to this Agreement from such Additional Holder in the form of Exhibit A attached hereto (a “Joinder”). Such Joinder shall specify the rights and obligations of the applicable Additional Holder under this Agreement. Upon the execution and delivery and subject to the terms of a Joinder by such Additional Holder, the Common Stock of the Company then owned, or underlying any rights then owned, by such Additional Holder (the “Additional Holder Common Stock”) shall be Registrable Securities to the extent provided herein and therein and such Additional Holder shall be a Holder under this Agreement with respect to such Additional Holder Common Stock.
5.12 Severability. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.
5.13 Entire Agreement; Restatement. This Agreement constitutes the full and entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter. Upon the Closing, the Existing Registration Rights Agreement shall no longer be of any force or effect.
[Signature pages follow.]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| COMPANY | ||
| Excelera Health, Inc. (f/k/a as Future Health ESG Corp.), a Delaware corporation | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Amended and Restated Registration Rights Agreement]
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| FUTURE HEALTH HOLDERS | ||
| Future Health ESG Associates 1, LLC | ||
| By: | ||
| Its: | ||
To add Cantor and the other Holders signature pages.
[Signature Page to Amended and Restated Registration Rights Agreement]
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| By: | ||
| Its: | ||
[Signature Page to Amended and Restated Registration Rights Agreement]
SCHEDULE A
Future Health Holders
BEA HOLDINGS, LLC
M2 ENTERPRISES HOLDINGS, LLC
HC1.COM, INC
MB EQUITY, LLC
MAGNETAR CONSTELLATION MASTER FUND, LTD.
MAGNETAR CONSTELLATION FUND II, LTD
MAGNETAR STRUCTURED CREDIT FUND, LP
MAGNETAR XING HE MASTER FUND LTD
MAGNETAR SC FUND LTD
PURPOSE ALTERNATIVE CREDIT FUND LTD
PURPOSE ALTERNATIVE CREDIT FUND – T LLC
MAGNETAR LAKE CREDIT FUND LLC
MAGNETAR CAPITAL MASTER FUND, LTD
MAGNETAR DISCOVERY MASTER FUND LTD
LMR MASTER FUND LIMITED
LMR CCSA MASTER FUND LIMITED
GLAZER SPECIAL OPPORTUNITY FUND I, LP
METEORA CAPITAL PARTNERS, LP
KEPOS ALPHA MASTER FUND L.P.
KEPOS SPECIAL SITUATIONS MASTER FUND L.P.
CAAS CAPITAL MANAGEMENT LP
POLAR MULTI-STRATEGY MASTER FUND
CITADEL CEMF INVESTMENTS LTD
[Schedule A to Amended and Restated Registration Rights Agreement]
FUTURE HEALTH ASSOCIATES 1, LLC
VARIANT CAPITAL LIMITED
HAKIM HOLDING GROUP COMPANY LIMITED
[Schedule A to Amended and Restated Registration Rights Agreement]
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT JOINDER
The undersigned is executing and delivering this joinder (this “Joinder”) pursuant to the Amended and Restated Registration Rights Agreement, dated as of [ ], 2022 (as the same may hereafter be amended, the “Registration Rights Agreement”), among Excelera Health, Inc. (f/k/a as Future Health ESG Corp.), a Delaware corporation (the “Company”), and the other persons or entities named as parties therein. Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Registration Rights Agreement.
By executing and delivering this Joinder to the Company, and upon acceptance hereof by the Company upon the execution of a counterpart hereof, the undersigned hereby agrees to become a party to, to be bound by, and to comply with the Registration Rights Agreement as a Holder of Registrable Securities in the same manner as if the undersigned were an original signatory to the Registration Rights Agreement, and the undersigned’s shares of Common Stock shall be included as Registrable Securities under the Registration Rights Agreement to the extent provided therein; provided, however, that the undersigned and its permitted assigns (if any) shall not have any rights as Holders, and the undersigned’s (and its transferees’) shares of Common Stock shall not be included as Registrable Securities, for purposes of the Excluded Sections.
Accordingly, the undersigned has executed and delivered this Joinder as of the day of , 20 .
| Signature of Stockholder | |
| Print Name of Stockholder | |
| Its: | |
| Address: |
| Agreed and Accepted as of | ||
| , 20 | ||
| Excelera Health, Inc. (f/k/a as Future Health ESG Corp.) | ||
| By: | ||
| Name: | ||
| Its: | ||
[Schedule A to Amended and Restated Registration Rights Agreement]
Exhibit 10.5
SPONSOR STOCKHOLDER SUPPORT AGREEMENT
This Sponsor Stockholder Support Agreement, dated as of June 13, 2022 (this “Agreement”), is made by and among:
| (1) | MacArthur Court Acquisition Corp., a California corporation (the “Seller”); |
| (2) | Excelera DCE, a California corporation (the “Company”); |
| (3) | Future Health ESG Corp., a Delaware corporation (“SPAC”); |
| (4) | Future Health ESG Associates 1, LLC, a Delaware limited liability company (“Sponsor”); and |
| (5) | the undersigned investors in SPAC (the “Investors”, and together with the Sponsor, the “SPAC Holders”). |
Whereas:
| (A) | concurrently with the entry into this Agreement, the Seller, the Company and SPAC, are entering into that certain Business Combination Agreement and Plan of Reorganization (as amended and/or restated from time to time, the “BCA”), which provides for, among other things, a business combination among SPAC and the Company pursuant to which the issued and outstanding shares in the Company shall be exchanged for shares of SPAC Common Stock; |
| (B) | as of the date hereof, the SPAC Holders own beneficially and/or of record those SPAC Securities set forth opposite such SPAC Holder’s name as set forth on Schedule A hereto; and |
| (C) | in order to induce the Seller and the Company to enter into the BCA, and consummate the transactions contemplated by the BCA (the “Transactions”), each of the SPAC Holders and SPAC desire to enter into this Agreement; |
Now, therefore, in consideration of the foregoing and of the mutual covenants and agreements contained herein and in the BCA, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
| 1 | Definitions |
| 1.1 | Capitalized terms used herein shall have the respective meanings given to them in this Agreement, or if not defined herein, as set forth in the BCA. |
| 1.2 | As used herein, the following terms shall have the respective meanings set forth below: |
“Beneficially Own” has the meaning given to such term under Rule 13d-3 of the Exchange Act.
“Common Shares” means each share of SPAC Common Stock, including the Founder Shares, held by the Investors or the Sponsor, whether now held or acquired after the date hereof and whether held of record or Beneficially Owned.
“Founder Shares” means each share of SPAC Common Stock held by the Investors or the Sponsor which were issued to the Investors or the Sponsor prior to SPAC’s initial public offering.
“SPAC Common Stock” means SPAC’s common stock, par value $0.0001 per share.
“SPAC Securities” means each of the Common Shares, SPAC Units and SPAC Warrants held by the Investors or the Sponsor.
“SPAC Unit” means SPAC’s units, with each unit consisting of one share of SPAC Common Stock and one-half of one SPAC Warrant.
“SPAC Warrant Agreements” means those certain warrant agreements dated September 9, 2021 by and between SPAC and Continental Stock Transfer & Trust Company.
“SPAC Warrants” means whole warrants to purchase shares of SPAC Common Stock as contemplated under the SPAC Warrant Agreements, with each whole warrant exercisable for one share of SPAC Common Stock at an exercise price of $11.50.
“Transfer” means to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate, or similarly dispose of, either voluntarily or involuntarily, to grant any proxies or powers of attorney with respect to, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, in each case, any interest owned by a person or any interest (including a beneficial interest) in, or the ownership, control or possession of, any interest owned by a person.
| 2 | Voting Obligations |
| 2.1 | From the date hereof until the earlier of (i) the Closing and (ii) termination of the BCA in accordance with Article IX thereof (such period, the “Interim Period”), such SPAC Holder, in his, her or its capacity as a holder of Common Shares, severally and not jointly, agrees irrevocably, for so long as this Agreement has not been terminated in accordance with its terms, and unconditionally that, at each Future Health Stockholders’ Meeting, at any other meeting of the stockholders of SPAC (whether annual, general, special or extraordinary and whether or not an adjourned or postponed meeting, however called and including any adjournment or postponement thereof), in connection with any written consent or written resolution of the stockholders of SPAC and in connection with any similar vote or consent of the holders of SPAC Warrants in their capacities as such, including in each of the Future Health Proposals, such SPAC Holder shall, and shall cause any other holder of record of any of such SPAC Holder’s Common Shares to: |
| 2.1.1 | when such meeting is held, appear at such meeting or otherwise cause all of such SPAC Holder’s Common Shares to be counted as present thereat for the purpose of establishing a quorum; |
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| 2.1.2 | vote (or duly and promptly execute and deliver an action by written consent or written resolution), or cause to be voted at such meeting (or cause such consent or resolution to be duly and promptly executed and delivered with respect to), all of such SPAC Holder’s Common Shares he, she or it is entitled to vote at the Future Health Stockholders’ Meeting in favor of each Future Health Proposal and any other matters reasonably necessary for consummation of the Transactions; and |
| 2.1.3 | vote (or duly and promptly execute and deliver an action by written consent or written resolution), or cause to be voted at such meeting (or cause such consent to be duly and promptly executed and delivered with respect to), all of such SPAC Holder’s Common Shares against any Future Health Business Combination Proposal and any other action that would reasonably be expected to impede, interfere with or materially delay or postpone the consummation of, or otherwise adversely affect, any of the Transactions, or result in a material breach of any representation, warranty, covenant or other obligation or agreement of SPAC, under the BCA or cause any condition thereunder not to be fulfilled. |
| 2.2 | The obligations of the SPAC Holders in this Section 2 shall apply whether or not the Future Health Board or other governing body or any committee, subcommittee or subgroup thereof recommends any of the Future Health Proposals and whether or not such board or other governing body, committee, subcommittee or subgroup thereof changes, withdraws, withholds, qualifies or modifies, or publicly proposes to change, withdraw, withhold, qualify or modify, the Future Health Board’s recommendation to its stockholders. |
| 3 | Waiver of Certain Rights |
On behalf of herself, himself, itself and its affiliates:
| 3.1 | Each SPAC Holder hereby irrevocably, for so long as this Agreement has not been terminated in accordance with its terms, and unconditionally agrees not to (i) demand that SPAC redeem its Common Shares in connection with the Transactions or (ii) otherwise participate in any such redemption by tendering or submitting any of its Common Shares for redemption; and |
| 3.2 | Each SPAC Holder hereby irrevocably, for so long as this Agreement has not been terminated in accordance with its terms, and unconditionally (i) waives any rights for any loans, if any, made by it or its affiliates or on its behalf or on behalf of its affiliates to SPAC or any of its affiliates to, in each case, be converted into securities and/or warrants exercisable for securities, in each case, of SPAC or any of its affiliates or their successors and assigns and (ii) agrees that no such loans, if any, shall be converted into any securities and/or warrants. |
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| 4 | Further Efforts & Assurances |
| 4.1 | During the Interim Period, each SPAC Holder (i) shall, and shall cause its affiliates to, use reasonable best efforts to take, or cause to be taken, all actions to do, or cause to be done, all things reasonably necessary, proper or advisable to consummate the Transactions on the terms and subject to the conditions set forth in the BCA and (ii) shall not, and shall cause its affiliates not to, take any action that would reasonably be expected to prevent or materially delay the satisfaction of any of the conditions to the Transactions set forth in Article VIII of the BCA. |
| 4.2 | Each of the parties hereto agrees to execute and deliver hereafter any further document, agreement or instrument of assignment, transfer or conveyance as may be necessary or reasonably requested by a party hereto to effectuate the purposes hereof and as may be reasonably requested in writing by another party hereto. |
| 4.3 | Each SPAC Holder hereby covenants and agrees that such SPAC Holder shall not (i) enter into any voting agreement or voting trust with respect to any of such SPAC Holder’s Common Shares that is inconsistent with such stockholder’s obligations pursuant to this Agreement, (ii) grant a proxy or power of attorney with respect to any of such SPAC Holder’s Common Shares that is inconsistent with such SPAC Holder’s obligations pursuant to this Agreement, or (iii) enter into any agreement or undertaking that is otherwise inconsistent with, or would interfere with, or prohibit or prevent such SPAC Holder from satisfying, such SPAC Holder’s obligations pursuant to this Agreement. |
| 4.4 | During the Interim Period, each SPAC Holder agrees not to and, to the extent applicable, agrees to cause its Affiliates and subsidiaries not to, and shall use its reasonable best efforts to cause its and their respective Representatives not to, directly or indirectly, solicit, initiate, continue or engage in discussions or negotiations with, or enter into any agreement with, or encourage, respond, provide information to or commence due diligence with respect to, any person (other than Seller, the Company, their shareholders and/or any of their Affiliates or Representatives) concerning any Future Health Business Combination Proposal. In addition, each SPAC Holder shall, and shall cause its controlled Affiliates to, and shall cause their respective Representatives to, immediately cease any and all existing discussions or negotiations with any person with respect to any Future Health Business Combination Proposal. |
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| 5 | Transfer Restrictions |
| 5.1 | Interim Period |
During the Interim Period, each SPAC Holder shall not, and shall cause any other holder of record of any of such SPAC Holder’s SPAC Securities not to, Transfer any SPAC Securities that she, he or it Beneficially Owns without the prior written consent of the Seller; provided, however, that the foregoing sentence shall not apply to the following (each, a “Permitted Transfer”):
| 5.1.1 | transfers to a trust, or other entity formed for estate planning purposes for the primary benefit of the spouse, domestic partner, parent, sibling, child or grandchild of any Investor or any other person with whom such Investor has a relationship by blood, marriage or adoption not more remote than first cousin; |
| 5.1.2 | if the undersigned is an individual, Transfers by will or intestate succession upon the death of any Investor; |
| 5.1.3 | transfers by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement; |
| 5.1.4 | if the undersigned is not a natural person, (i) Transfers to a corporation, partnership, limited liability company, trust, syndicate, association or other business entity that controls, is controlled by or is under common control or management with such SPAC Holder and (ii) distributions to managers, partners, limited liability company members or equityholders who control such SPAC Holder; |
| 5.1.5 | in the event of SPAC’s liquidation; |
| 5.1.6 | by virtue of the laws of the jurisdiction of formation of any Sponsor or any of Sponsor’s limited liability company agreement, limited partnership agreement or equivalent organizational document, upon dissolution of such Sponsor; and |
| 5.1.7 | the establishment of a trading plan pursuant to Rule 10b5-1 promulgated under the Exchange Act, provided that such plan does not provide for the transfer of SPAC Securities or any securities convertible into or exercisable or exchangeable for SPAC Securities during the Interim Period; |
provided that in the case of any Transfer or distribution pursuant to Section 5.1.1 through Section 5.1.7, each donee, distributee or other transferee shall agree in writing, in form and substance reasonably satisfactory to the applicable SPAC Holder, the Company and the Seller to be bound by the provisions of this Agreement.
| 5.2 | Any Transfer in violation of the provisions of this Section 5 shall be null and void ab initio and be of no force or effect. |
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| 6 | Representations and Warranties |
Each SPAC Holder hereby represents and warrants (severally and not jointly as to herself, himself or itself only) to SPAC, the Seller and the Company as follows:
| 6.1 | if such person is not an individual, it is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, formed, organized or constituted, and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby are within such person’s corporate, limited liability company or other organizational powers and have been duly authorized by all necessary corporate, limited liability company or other organizational actions on the part of such person; |
| 6.2 | if such person is an individual, such person has full legal capacity, right and authority to execute and deliver this Agreement and to perform its obligations hereunder; |
| 6.3 | this Agreement has been duly executed and delivered by such person and, assuming due authorization, execution and delivery by the other parties to this Agreement, this Agreement constitutes a legally valid and binding obligation of such person, enforceable against such person in accordance with the terms hereof (except as enforceability may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies); |
| 6.4 | the execution and delivery of this Agreement by such person does not, and the performance by such person of its obligations hereunder will not require any consent or approval that has not been given or other action that has not been taken by any third party, in each case, to the extent such consent, approval or other action would prevent, enjoin or materially delay the performance by such person of its obligations under this Agreement. The execution and delivery of this Agreement by the parties hereto does not, and the performance by the parties hereto of their respective obligations hereunder will not, conflict with, or require the consent of any member of Sponsor pursuant to the Sponsor’s limited liability company agreement; |
| 6.5 | Schedule A hereto sets forth opposite such SPAC Holder’s name the number of all of SPAC Securities of which such SPAC Holder has beneficial or record ownership, or the power to vote (including, without limitation, by proxy or power of attorney) as of the date hereof; and except for the SPAC Securities denoted on Schedule A, as of the date of this Agreement, such SPAC Holder is not a record holder of any (i) SPAC Securities or (ii) any other securities of SPAC having the right to vote on any matters on which the holders of equity securities of SPAC may vote; |
| 6.6 | such SPAC Holder understands and acknowledges that each of the Seller and the Company is entering into the BCA in reliance upon the execution and delivery of this Agreement by the SPAC Holders. |
| 6.7 | such SPAC Holder is a sophisticated stockholder and has adequate information concerning the business and financial condition of SPAC and the Company to make an informed decision regarding this Agreement and the Transactions and has independently and without reliance upon SPAC, the Seller or the Company and based on such information as such SPAC Holder has deemed appropriate, made its own analysis and decision to enter into this Agreement; such SPAC Holder acknowledges that neither SPAC, the Seller nor the Company has made and does not make any representation or warranty, whether express or implied, of any kind or character except as expressly set forth in this Agreement; and such SPAC Holder acknowledges that the agreements contained herein with respect to SPAC Securities held by such SPAC Holder are irrevocable for so long as this Agreement has not been terminated in accordance with its terms; |
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| 6.8 | as of the date hereof, there is no Action pending or, to the knowledge of such SPAC Holder, threatened, against such SPAC Holder that would reasonably be expected to impair the ability of such SPAC Holder to perform such SPAC Holder’s obligations hereunder or to consummate the transactions contemplated hereby; and |
| 6.9 | without limiting the generality of the foregoing, Sponsor hereby represents and warrants that all of the Founder Shares issued and outstanding as of the date first written above are subject to the obligations under this Agreement, notwithstanding any entitlements thereto that any equityholders of Sponsor may have. |
| 7 | Equitable Adjustments |
If, and as often as, there are any changes in SPAC or SPAC Securities by way of stock split, sub-division, stock or share dividend, combination, consolidation or reclassification, or through merger, consolidation, reorganization, recapitalization or business combination, or by any other means, equitable adjustment shall be made to the provisions of this Agreement as may be required so that the rights, privileges, duties and obligations hereunder shall continue with respect to SPAC or the SPAC Securities each as so changed.
| 8 | Stop Transfer Order; Legend |
Each SPAC Holder hereby authorizes SPAC to maintain a copy of this Agreement at either the executive office or the registered office of SPAC. In furtherance of this Agreement, each SPAC Holder hereby authorizes and will instruct SPAC, promptly after the date hereof, to enter, or cause its transfer agent to enter, a stop transfer order with respect to all of such SPAC Holder’s SPAC Securities with respect to any Transfer not permitted hereunder and to include the following legend on any certificates or other instruments representing (or any notice given pursuant to the laws of the Cayman Islands in respect of) such SPAC Holder’s SPAC Securities: “THE SHARES OF STOCK OR OTHER SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VOTING AND TRANSFER RESTRICTIONS PURSUANT TO THAT CERTAIN SPONSOR STOCKHOLDER SUPPORT AGREEMENT, DATED AS OF JUNE 13, 2022, BY AND AMONG MACARTHUR COURT ACQUISITION CORP., EXCELERA DCE, FUTURE HEALTH ESG CORP., FUTURE HEALTH ESG ASSOCIATES 1, LLC, AND CERTAIN OTHER PERSONS PARTY THERETO. ANY TRANSFER OF SUCH SHARES OF STOCK OR OTHER SECURITIES IN VIOLATION OF THE TERMS AND PROVISIONS OF SUCH SPONSOR STOCKHOLDER SUPPORT AGREEMENT SHALL BE NULL AND VOID AB INITIO AND HAVE NO FORCE OR EFFECT WHATSOEVER.”
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| 9 | Updates to Schedule A; Admission of New SPAC Holders |
During the Interim Period, each SPAC Holder shall promptly notify SPAC of any increase, decrease or other change in the number of SPAC Securities held by or on behalf of such SPAC Holder (for the avoidance of doubt, each SPAC Holder acknowledges and agrees that Section 5.1 prohibits all Transfers of its SPAC Securities, other than Permitted Transfers, during the Interim Period, including any such SPAC Securities hereafter acquired by any SPAC Holder). Promptly following each such notification, SPAC or Holdco (as applicable) shall update Schedule A to reflect the applicable changes as they relate to SPAC Securities and provide a copy of such updated Schedule A to each of the parties hereto, and such updated Schedule A shall control for all purposes of this Agreement (unless and until it is later updated in accordance with this Section 9). Any such update to Schedule A pursuant to this Section 9 shall not be deemed an amendment to this Agreement for purposes of Section 13.
| 10 | Termination of Existing Registration Rights Agreement |
Prior to Closing, in connection with the entry into the Amended and Restated Registration Rights Agreement by and among SPAC and the SPAC Holders, the SPAC Holders shall cause all existing registration rights agreements (including that certain Registration Rights Agreement, dated as of September 9, 2021, entered into by and among SPAC, Cantor Fitzgerald & Co. and the SPAC Holders party thereto) entered into between SPAC and any other party, including the Sponsor but not including any PIPE Investors, to be terminated or restated in its entirely, as applicable, in each case. No parties to any such terminated or superseded registration rights agreements shall have any further rights or obligations thereunder.
| 11 | Consent to Disclosure |
Each SPAC Holder hereby consents to the publication and disclosure in the Proxy Statement (and, as and to the extent otherwise required by applicable securities Laws or the SEC or any other securities authorities, any other documents or communications provided by SPAC, the Seller or the Company to any Governmental Authority or to securityholders of SPAC) of such SPAC Holder’s identity and beneficial ownership of SPAC Securities and the nature of such SPAC Holder’s commitments, arrangements and understandings under and relating to this Agreement and, if deemed appropriate by SPAC or the Seller, a copy of this Agreement. Each SPAC Holder will promptly provide any information reasonably requested by SPAC or the Seller for any regulatory application or filing made or approval sought in connection with the Transactions (including filings with the SEC).
| 12 | No Challenges |
Each SPAC Holder agrees not to commence, join in, facilitate, assist or encourage, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against SPAC, the Seller, the Company or any of their respective successors, directors or officers (i) challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement or (ii) alleging a breach of any fiduciary duty of any person in connection with the evaluation, negotiation or entry into the BCA or any other agreement in connection with the Transactions.
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| 13 | Entire Agreement; Assignment; Amendment |
| 13.1 | This Agreement and the other agreements referenced herein constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. This Agreement shall not be assigned (whether pursuant to a merger, by operation of law or otherwise) by any party without the prior express written consent of the other parties hereto. This Agreement may be amended in writing by all parties hereto by an instrument in writing signed by each of the parties hereto. |
| 13.2 | At any time prior to the Closing, (i) the Sponsor, on behalf of SPAC Holders may (a) extend the time for the performance of any obligation or other act of the Seller or the Company, (b) waive any inaccuracy in the representations and warranties of the Seller or the Company contained herein or in any document delivered by the Seller or the Company pursuant hereto and (c) waive compliance with any agreement of the Seller or the Company or any condition to its own obligations contained herein and (ii) the Seller and the Company acting together may (a) extend the time for the performance of any obligation or other act of any SPAC Holder, (b) waive any inaccuracy in the representations and warranties of any SPAC Holder contained herein or in any document delivered by any SPAC Holder pursuant hereto and (c) waive compliance with any agreement of any SPAC Holder or any condition to the obligations of SPAC Holders contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby. |
| 14 | Parties in Interest |
This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
| 15 | Counterparts |
This Agreement may be executed and delivered (including by facsimile or portable document format (pdf) transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
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| 16 | Severability |
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the Transactions be consummated as originally contemplated to the fullest extent possible.
| 17 | Governing Law; Venue; Waiver of Jury Trial |
Sections 10.06 and 10.07 of the BCA are incorporated herein by reference, mutatis mutandis.
| 18 | Notices |
All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by email or by registered or certified mail (postage prepaid, return receipt requested) to (i) if to SPAC or the Sponsor, the address for SPAC in accordance with the terms of Section 10.01 of the BCA, (ii) if to the Company or the Seller, the address for the Company or the Seller in accordance with the terms of Section 10.01 of the BCA and (iii) if to any of the Investors, the address set forth in such Investor’s signature block hereto.
| 19 | Termination |
This Agreement shall automatically terminate on the earliest of: (a) the valid termination of the BCA (in which case this Agreement shall be of no force and effect), (b) the Closing and (c) the mutual written agreement of the parties hereof; provided, that no such termination shall relieve any party hereto from any liability resulting from its pre-termination breach of this Agreement.
| 20 | Specific Performance |
The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof, and, accordingly, that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof (including the parties’ obligation to consummate the Transactions) in any court of the United States located in the State of Delaware without proof of actual damages or otherwise, in addition to any other remedy to which they are entitled at law or in equity as expressly permitted in this Agreement. Each of the parties hereby further waives (i) any defense in any action for specific performance that a remedy at law would be adequate and (ii) any requirement under any Law to post security or a bond as a prerequisite to obtaining equitable relief.
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| 21 | Interpretation |
The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. Wherever this Agreement uses “it”, “its” or derivations thereof to refer to a natural person, such references shall be deemed references to “her”, “him” or “his”, as applicable.
| 22 | No Partnership, Agency or Joint Venture |
This Agreement is intended to create a contractual relationship between the parties hereto, and nothing contained herein is intended to create, and does not create, any agency, partnership, joint venture or any like relationship between or among any of the parties hereto. Without in any way limiting the rights or obligations of any party hereto under this Agreement, prior to the Closing, (i) no party is by virtue of this Agreement authorized as an agent, employee or legal representative of any other party, (ii) no party shall have the power by virtue of this Agreement to control the activities and operations of any other and (iii) no party shall have any power or authority by virtue of this Agreement to bind or commit any other party, (iv) each of the SPAC Holders (a) has acted independently regarding its decision to enter into this Agreement and regarding its investment in SPAC and/or Sponsor, as applicable, solely on its own behalf and shall not have any obligation to perform on behalf of any other SPAC Holder of Common Stock or any liability (regardless of the legal theory advanced) for any breach of this Agreement by any other SPAC Holder and (b) by entering into this Agreement does not intend to form a “group” for purposes of Rule 13d-5(b)(1) of the Exchange Act or any other similar provision of applicable Law.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
| MACARTHUR COURT ACQUISITION CORP. | ||
| By | /s/ Sanjay Patil | |
| Name: Sanjay Patil | ||
| Title: Chief Executive Officer | ||
| EXCELERA DCE | ||
| By | /s/ Desmond Thio | |
| Name: Desmond Thio | ||
| Title: Chief Executive Officer | ||
| FUTURE HEALTH ESG CORP. | ||
| By | /s/ Bradley Bostic | |
| Name: Bradley Bostic | ||
| Title: Chief Executive Officer | ||
| FUTURE HEALTH ESG ASSOCIATES 1, LLC | ||
| By | /s/ Travis A. Morgan | |
| Name: Travis A. Morgan | ||
| Title: Manager | ||
[Signature page to the Sponsor Stockholder Support Agreement]
| INVESTORS | |
| BEA HOLDINGS, LLC | |
| /s/ Bradley A. Bostic | |
| Name: Bradley A. Bostic | |
| Title: Manager | |
| Address: | |
| M2 ENTERPRISES HOLDINGS, LLC | |
| /s/ Travis A. Morgan | |
| Name: Travis A. Morgan | |
| Title: Manager | |
| Address: | |
| HC1.COM, INC | |
| /s/ Chris Brown | |
| Name: Chris Brown | |
| Title: Chief Operating Officer | |
| Address: | |
| /s/ R. Mark Lubbers | |
| Name: R. Mark Lubbers | |
| Address: | |
| /s/ Dr. John F. Mills | |
| Name: Dr. John F. Mills | |
| Address: | |
| /s/ Dr. Nancy L. Snyderman | |
| Name: Dr. Nancy L. Snyderman | |
| Address: | |
| MB EQUITY, LLC | |
| /s/ Travis A. Morgan | |
| Name: Travis A. Morgan | |
| Title: Managing Manager | |
| Address: | |
[Signature page to the Sponsor Stockholder Support Agreement]
Exhibit 99.1
Excelera to Become Publicly Traded via Merger with Future Health (NASDAQ: FHLT)
- Excelera is a leading AI technology platform that equips physicians with precision medicine insights and financial resources to excel in Medicare's value-based delivery programs.
- Excelera’s science-driven Human Insights™ care management tools delivered medical cost savings of over 14% compared to the Medicare benchmark for the 2020 plan year, ranking 8th in the nation among all 513 MSSP Accountable Care Organizations as reported by CMS.
- On January 1, 2022, Excelera launched a Medicare Direct Contracting Entity (DCE) which manages care for over twenty-two thousand seniors1. CMS projects Excelera’s medical cost ratio for its initial quarter was 94%.
- The transaction values Excelera at $459 million (approximately 1.3x annualized Q1 22 revenue of $352 million) and is expected to provide up to $282 million in net cash proceeds to accelerate expansion of the Excelera network into current and new geographies.
- Certain existing shareholders have fully subscribed to a $100 million PIPE at $11 per share, and a forward purchase agreement to acquire an additional $20 million of FHLT shares on the open market prior to closing.
- The statements contained in this document are solely those of the authors and do not necessarily reflect the views or policies of CMS. The authors assume responsibility for the accuracy and completeness of the information contained in this document.
NEWPORT BEACH, Calif. & INDIANAPOLIS--(BUSINESS WIRE)--Excelera DCE ("Excelera" or the "Company"), a leading Accountable Care Organization and AI Platform, and Future Health ESG Corp. ("Future Health") (NASDAQ: FHLT), a special purpose acquisition company, announced today they have entered into a definitive business combination agreement that will support the expansion of Excelera's science-driven approach to managing care for seniors. Upon completion of the transaction, the combined company is expected to operate as Excelera Health, Inc., and is expected to be listed on the Nasdaq under the new ticker symbol "XLRA".
Launched on January 1, 2022, Excelera optimizes delivery of value-based care for more than 22,000 seniors through its network of participating physicians in California and Hawaii. The Company operates under Medicare’s novel Global & Professional Direct Contracting program (to be renamed ACO REACH effective in 2023). Excelera is one of only 99 ACOs participating in the direct contracting program for plan year 2022. All of the transaction proceeds (at least $105 million, and up to $282 million assuming no public shareholders of Future Health exercise their redemption rights) will be available to fund growth of the platform into additional geographies.
Excelera's existing management team will continue to lead the Company following the transaction. The Company’s Board of Directors will include Future Health directors Travis Morgan, Co-Founder and CFO, and Nancy L. Snyderman, MD, a trained pediatrician, head and neck surgeon, and former Chief Medical Editor for NBC News.
Management Comments
"After more than 20 years practicing as a cardiologist, I founded Excelera to deliver a new paradigm of senior care, informed by the latest medical and data science. Rather than rationing access to care or avoiding high risk patients, our model actually embraces the opportunity to improve outcomes for the sickest and most vulnerable seniors, " said Excelera Founder Dr. Sanjay Patil. "By proactively incorporating genomics and predictive machine learning algorithms into care delivery, for example, our Human Insights™ healthcare platform has been proven to deliver better quality and outcomes at a lower cost – reducing medical expense by over 14% compared to the Medicare benchmark during the 2020 plan year."
Bradley Bostic, Co-founder and CEO of Future Health added, "Our mission with Future Health was to identify and bring to the public markets a disruptive company that leverages modern technology and data-science to improve outcomes, reduce waste, and better personalize care. It is difficult to imagine a company better aligned with this mission than Excelera. What they’ve established is a truly novel and impactful approach to value-based care, and we are excited to partner with the talented Excelera team to create exceptional shareholder value while improving lives with smarter and more proactive healthcare.”
Transaction Overview
The transaction values the combined company at an initial enterprise value of approximately $459 million, a multiple of 1.3x annualized Q1 22 revenues of $352 million. Forty million shares will be issued to the seller at closing, and an earn-out of 20 million additional shares will be payable when the Company achieves $150 million in revenue for any calendar quarter prior to the fifth anniversary of the closing. Excelera’s parent will roll over 100% of its equity stake into the new company.
After transaction expenses, the proposed business combination is expected to deliver at least $105 million, and up to $282 million of net proceeds, including the contribution of up to $201 million of cash held in Future Health's trust account and a $100 million fully subscribed private placement (PIPE) of common stock of the combined company, priced at $11.00 per share. PIPE investors have also entered into a forward purchase agreement to acquire an additional $20 million of FHLT shares on the open market prior to closing of the transaction.
Including the earn-out and assuming no public shareholders of Future Health exercise their redemption rights, Excelera’s shareholders will own approximately 64%, Future Health shareholders will own approximately 21%, PIPE investors will own approximately 10%, and Future Health's sponsors will own approximately 5% of the issued and outstanding shares of common stock of the combined company.
All common shares held by Excelera’s parent, PIPE investors, and the Sponsor are subject to a Lock-up Agreement until the earlier of one year after the Closing, or with respect to 1/3 of the Lock-up Shares in each instance, the dates subsequent to the Closing on which the price of the Company’s common stock equals or exceeds a target price of $12.00, $13.00 and $14.00 per share. The Lock-up Agreement further provides that no more than 1/3 of originally issued lockup shares may be transferred within any continuous 90-day period.
The transaction has been unanimously approved by the boards of Excelera and Future Health, and is subject to approval by Future Health's shareholders and other customary closing conditions. The transaction is expected to close during the second half of 2022. A more detailed description of the transaction terms and a copy of the business combination agreement will be included in a current report on Form 8-K to be filed by Future Health with the United States Securities and Exchange Commission (the "SEC").
Advisors
Cantor Fitzgerald & Co., BTIG, LLC, and Roth Capital Partners, LLC are acting as capital markets advisors to Future Health. Buchanan Ingersoll & Rooney PC is serving as legal counsel to Excelera, and McDermott Will & Emery LLP is serving as legal counsel to Future Health.
Management Presentation
A management presentation will be made available online and filed with the SEC (viewable at www.sec.gov) after Future Health has filed a proxy statement in connection with the transaction.
About Excelera
Excelera is a technology-enabled care delivery platform that equips physicians with precision medicine insights and financial resources to succeed in Medicare's value-based delivery programs. We earn profits by effectively managing cost in the value chain so that doctors can deliver better care while realizing substantial improvements in their bottom line. Like Airbnb and Uber for independent homeowners and drivers, Excelera offers a platform that allows physicians to remain independent, but operate with the sophistication of a nationally networked health maintenance organization (HMO). We provide the contracting vehicles, technology, and other necessary services to make our doctors clinically and financially successful. Our novel Human Insights™ platform combines proprietary machine learning algorithms with genomics and other data to proactively focus on prevention and management of chronic disease. By using
Human Insights™ to deliver a 14.1% reduction in cost of care vs the Medicare benchmark, Excelera MSSP ACO (a predecessor plan to Excelera DCE) ranked #8 in care efficiency among all 513 participating MSSP ACOs in 2020. Our Global & Professional Direct Contracting plan went live January 1, 2022 with over twenty-two thousand covered Medicare lives in California and Hawaii.
About Future Health ESG Corp.
Future Health ESG Corp. is a blank check company organized to pursue a business combination with a scale-up stage healthcare company that leverages modern technology and data science to improve outcomes, reduce waste, and better personalize care. Future Health ESG Corp. is led by Bradley Bostic and Travis Morgan, who each have hands-on experience operating and investing in precision healthcare technology companies across the corporate life cycle. Future Health is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012.
Additional Information
In connection with the proposed business combination, Future Health intends to file with the SEC a preliminary proxy statement. Future Health will mail a definitive proxy statement and other relevant documents relating to the proposed business combination to its shareholders. This press release is not a substitute for the definitive proxy statement or any other document that Future Health will send to its shareholders in connection with the proposed business combination. Investors and security holders of Future Health are advised to read, when available, the proxy statement in connection with Future Health's solicitation of proxies for its extraordinary general meeting of shareholders to be held to approve the proposed business combination (and related matters) because the proxy statement will contain important information about the proposed business combination and the parties to the proposed business combination. The definitive proxy statement will be mailed to shareholders of Future Health as of a record date to be established for voting on the proposed business combination. Shareholders will also be able to obtain copies of the proxy statement without charge, once available, at the SEC's website at www.sec.gov, or by directing a request to: 8 The Green, Suite 12081, Dover, DE 19901.
Participants in the Solicitation
Future Health, the Company and their respective directors, executive officers, other members of management, and employees, under SEC rules, may be deemed participants in the solicitation of proxies of Future Health's shareholders in connection with the proposed business combination. Investors and security holders may obtain more detailed information regarding the names and interests in the proposed business combination of Future Health's directors and officers in Future Health's filings with the SEC, including Future Health's initial public offering prospectus, which was filed with the SEC on September 9, 2021, Future Health's subsequent quarterly reports on Form 10-Q and annual report on Form 10-K, and the proxy statement of Future Health for the proposed business combination, and such information and names of the Company's managers and executive officers will also be in the proxy statement to be filed with the SEC by Future Health.
No Offer of Solicitation
This press release is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for, or buy any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed business combination or otherwise, nor shall there be any sale, issuance or transfer or securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Forward-Looking Statements
Certain statements made herein are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "predict," "potential," "seem," "seek," "future," "outlook" and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding future events, the proposed business combination between Future Health and the Company, the estimated or anticipated future results and benefits of the combined company following the proposed business combination, including the likelihood and ability of the parties to successfully consummate the proposed business combination, future opportunities for the combined company, and other statements that are not historical facts. These statements are based on the current expectations of Future Health's management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Future Health and the Company, are difficult or impossible to predict, and will differ from assumptions. These statements are subject to a number of risks and uncertainties regarding Future Health's business and the proposed business combination, and actual results may differ materially. These risks and uncertainties include, but are not limited to, general economic, political and business conditions; the inability of the parties to consummate the proposed business combination or the occurrence of any event, change or other circumstances that could give rise to the termination of the Business combination agreement; the outcome of any legal proceedings that may be instituted against the parties following the announcement of the proposed business combination; the receipt of an unsolicited offer from another party for an alternative business transaction that could interfere with the proposed business combination; the risk that the approval of the shareholders of Future Health for the potential transaction is not obtained; failure to realize the anticipated benefits of the proposed business combination, including as a result of a delay in consummating the potential transaction or difficulty in integrating the businesses of Future Health and the Company; the risk that the proposed business combination disrupts current plans and operations as a result of the announcement and consummation of the proposed business combination; the ability of the combined company to grow and manage growth profitably and retain its key employees; the amount of redemption requests made by Future Health's shareholders; the inability to obtain or maintain the listing of the post-acquisition company's securities on Nasdaq following the proposed business combination; costs related to the proposed business combination; and those factors discussed in Future Health's final prospectus relating to its initial public offering, dated September 9, 2021, and other filings with the SEC. There may be additional risks that Future Health presently does not recognize or that Future Health currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements provide Future Health's expectations, plans or forecasts of future events and views as of the date of this communication. Future Health anticipates that subsequent events and developments will cause Future Health's assessments to change. However, while Future Health may elect to update these forward-looking statements at some point in the future, Future Health specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Future Health's assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Contacts
Investors
investor.relations@excelerahealth.com
Media
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Source: Future Health ESG Corp. and Excelera DCE